Some balance sheet information is shown here |(all values in millions of dollars). a. What change in the book value of the company's equity took place at the end of 2018? b. Is the company's market-to-book ratio meaningful? Is its book debt-equity ratio meaningful? Explain.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Some balance sheet information is shown below: (all values in millions of dollars). a. What change in the book value of the company's equity took place at the end of 2018? b. Is the company's market-to-book ratio meaningful? Is its book debt-equity ratio meaningful? Explain. a. What change in the book value of the company's equity took place at the end of 2018? The book value of equity ▼ increased or decreased by $_____ billion from the end of the previous year, and was ▼ positive or negative. (Select from the drop-down menus and round to three decimal places.)
Data table
Balance Sheet:
3/31/2019
12/31/2018
9/30/2018
6/30/2018
Assets
Current Assets
Cash and cash equivalents
293
300
255
232
Net receivables
401
362
385
460
Inventory
Other current assets
374
342
437
306
60
43
53
45
Total Current Assets
1,128
1,047
1,130
1,043
Long-term investments
Property, plant, and equipment
Goodwill
128
97
200
979
991
995
1,052
744
748
736
742
Other assets
777
827
906
797
Total Assets
3,756
3,710
3,767
3,834
Liabilities
Current Liabilities
Accounts payable
Short/current long-term debt
876
1,467
922
980
410
173
288
Other current liabilities
Total Current Liabilities
1,286
2,381
1,469
2,124
1,095
1,268
Long-term debt
Other liabilities
474
475
435
574
559
Total Liabilities
551
4,102
- 346
4,167
- 457
2,128
1,639
3,767
2,294
Total Shareholder's Equity
Total Liabilities and Shareholder's Equity
1,540
3,756
3,710
3,834
Transcribed Image Text:Data table Balance Sheet: 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Assets Current Assets Cash and cash equivalents 293 300 255 232 Net receivables 401 362 385 460 Inventory Other current assets 374 342 437 306 60 43 53 45 Total Current Assets 1,128 1,047 1,130 1,043 Long-term investments Property, plant, and equipment Goodwill 128 97 200 979 991 995 1,052 744 748 736 742 Other assets 777 827 906 797 Total Assets 3,756 3,710 3,767 3,834 Liabilities Current Liabilities Accounts payable Short/current long-term debt 876 1,467 922 980 410 173 288 Other current liabilities Total Current Liabilities 1,286 2,381 1,469 2,124 1,095 1,268 Long-term debt Other liabilities 474 475 435 574 559 Total Liabilities 551 4,102 - 346 4,167 - 457 2,128 1,639 3,767 2,294 Total Shareholder's Equity Total Liabilities and Shareholder's Equity 1,540 3,756 3,710 3,834
Correct
Some balance sheet information is shown here E (all values in millions of dollars).
a. What change in the book value of the company's equity took place at the end of 2018?
b. Is the company's market-to-book ratio meaningful? Is its book debt-equity ratio meaningful? Explain.
a. What change in the book value of the company's equity took place at the end of 2018?
(Select from the drop-down menus and round to
The book value of equity
V by $
billion from the end of the previous year, and was
three decimal places.)
Transcribed Image Text:Correct Some balance sheet information is shown here E (all values in millions of dollars). a. What change in the book value of the company's equity took place at the end of 2018? b. Is the company's market-to-book ratio meaningful? Is its book debt-equity ratio meaningful? Explain. a. What change in the book value of the company's equity took place at the end of 2018? (Select from the drop-down menus and round to The book value of equity V by $ billion from the end of the previous year, and was three decimal places.)
Expert Solution
Step 1

Solution:-

Given,

Balance sheet Information for 3/31/2019 ; 12/31/2018 ; 9/30/2018 ; 6/30/2018 :

 

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