Crash Course in Accounting and Financial Statement Analysis, Second Edition

Introduction

RECALL THAT THE income statement reports a company’s revenues, expenses, and profitability over a specified period of time.

The balance sheet reports the company’s resources (assets) and how those resources were funded (liabilities and shareholders’ equity) on a particular date (end of the quarter or fiscal year) (Exhibit 6.1).

Exhibit 6.1. The Balance Sheet Depicts a Company’s Resources and its Funding at the End of the Fiscal Year

In millions, except shares and per share amounts			Dec. 31, 2005	Jan. 1, 2005
Assets:
	Cash and cash equivalents		$513.4	$392.3
	Accounts receivable, net		1,839.6	1,764.2
	Inventories		5,719.8	5,453.9
	Deferred income taxes		241.1	243.1
	Other current assets		78.8	66.0
Total current assets	8,392.7	7,919.5
	Property and equipment, net		3,952.6	3,505.9
	Goodwill		1,789.9	1,898.5
	Intangible assets, net		802.2	867.9
	Deferred income taxes		122.5	137.6
	Other assets		223.5	217.4
Total assets	$ 15,283.4	$ 14,546.8
Liabilities:
	Accounts payable		$2,467.5	$2,275.9
	Accrued expenses		1,521.4	1,666.7
	Short-term debt		253.4	885.6
	Current portion of long-term debt		341.6	30.6
Total current liabilities	4,583.9	4,858.8
	Long-term debt		1,594.1	1,925.9
	Other long-term liabilities		774.2	774.9
	Commitments and contingencies (Note10)
Shareholders’ equity:
	Preferred stock, $0.01 par value: authorized 120,619 shares; no shares issued or outstanding		—	—
	Preference stock, series one ESOP convertible, par value $1.00: authorized 50,000,000 shares; issued and outstanding 4,165,000 shares December 31, 2005 and 4,273,000 shares at January1, ...