Prepare a Vertical Analysis for the Balance Sheet Data Given

question 122

Essay

Prepare a vertical analysis for the balance sheet data given below. (Round to two decimal places.)
Petals, Inc.
Balance Sheet
December 31,2019 Assets
Current Assets:
$$\begin{array} { l l } \text { Cash and Cash Equivalents } & \$ 10,000 \\\text { Accounts Receivable, Net } & 15,600 \\\text { Merchandise Inventory } & \underline { 38,000 } \\\text { Total Cument Assets } & 63,600 \\\text { Long-term Invetments } & 15,000 \\\text { Property, Plant, and Equipment, Net } & \underline { \$ 195,000} \\\text { Total Assets } & \underline {\$ 273,600}\end{array}$$ Liabilities
Current Liabilities:
$\begin{array}{ll}\text { Accounts Payable } & \$ 8,500 \\\text { Notes Payable } & \underline{1,400} \\\text { Total Current Liabilities } & 9,900 \\\text { Long-term Liabilities } & \underline{54,000} \\\text { Total Liabilities } & 63,900\end{array}$
Stockholders' Equity
$$\begin{array} { l l } \text { Common Stcck } & 161,000 \\\text { Retained Earnings } & \underline { 48,700 } \\\text { Total Stockholders' Equity } & \underline { 209,700 } \\\text { Total Liabilities and Stockholders' Equity } & \underline { \$ 273,600}\end{array}$$

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Definitions:

Risk Averse

A description of an investor or investment philosophy that prioritizes the minimization of risk over potential returns.

Risk-free Rate

The theoretical rate of return on an investment with no risk of financial loss, typically represented by government bonds.

Market Risk Premium

The additional return an investor requires for holding a risky market portfolio instead of risk-free assets, reflecting the extra risk.

Required Return

The minimum expected return by investors for investing in a particular asset, considering the risk associated with it.