Question

The following information is from Samsung (Samsung.com or its financial statements in Appendix A), which is a leading manufacturer of consumer electronic products.

W in millions Current Year Prior Year

Cash W 22,636,744 W 16,840,766

Accounts receivable 28,520,689 28,234,485

Current assets 124,814,725 115,146,026

Total assets 242,179,521 230,422,958

Current liabilities 50,502,909 52,013,913

Shareholders’ equity 179,059,805 168,088,188

Net sales 200,653,482 206,205,987

Required

1. For each year, compute the percentage (rounded to one decimal) that cash represents of current assets, total assets, current liabilities, and shareholders’ equity. Comment on any trends in these percentages.

Short answer

Answer

	Current year (%)	Prior year (%)
Current assets	4.51	5.84
Total assets	9.70	12.69
Current liabilities	1.23	2.09
Stockholders’ equity	6.91	8.98

Step-by-step solution

Step-by-Step SolutionStep 1: Meaning of Current Liabilities

Current liabilities are those liabilities of the company that needs to be paid in one year.

Computation-

	Current year balance	Cash as percent of:	Prior year balance	Cash as percent of:
Cash(and equivalents)	22,636,744	—	16,840,766	—
			\
Current assets	124,814,725	4.51	115,146,026	5.84
Total assets	242,179,521	9.70	230,422,958	12.69
Current liabilities	50,502,909	1.23	52,013,913	2.09
Stockholders’ equity	179,059,805	6.91	168,088,188	8.98

Analysis-

Analysis comment: Cash has diminished as a percent in each of these bases for this two-period comparison. It recommends that Samsung’s liquidity (cash) position has not improved.