Common Sized Financial Statements For Leslie Fay

1488 Words Nov 13th, 2014 6 Pages
1. Prepare common-sized financial statements for Leslie Fay for the period 1987–1991. For that same period, compute for Leslie Fay the ratios shown in Exhibit 2. Given these data, which financial statement items do you believe should have been of particular interest to BDO Seidman during that firm’s 1991 audit of Leslie Fay? Explain.
The Leslie Fay Companies
Common-sized Balance Sheets 1987–1991
(in millions) ASSETS 1991 1990 1989 1988 1987 Current Assets: Cash $ 1.2 $1.1 $ 1.4 $1.5 $1.3 Receivables (net) 30.0 31.8 30.3 30.3 27.1 Inventories 32.0 33.7 31.3 29.5 27.2
Prepaid Expenses and Other Current Assets 5.0 5.1 5.0 4.5 5.2 Total Current Assets 68.2 71.7 68.0 65.8 60.8

Property, Plant and Equipment 9.9 6.8 7.0 7.1 7.9 Goodwill 20.5 20.1 23.5 25.9 29.6 Deferred Charges and Other Assets 1.4 1.4 1.5 1.2 1.7 Total Assets $100.0 $100.0 $100.0 $100.0 $100.0
LIABILITIES AND STOCKERHOLDERS’EQUITY Current Liabilities: Notes Payable 8.8 10.9 5.9 8.0 5.1 Current Maturities of Long-term Debt 0.0 0.0 0.0 0.0 .5 Accounts Payable 8.1 9.9 10.0 12.6 10.3 Accrued Interest Payable .8 .9 1.1 1.1 1.2 Accrued…

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