You are a bank loans officer trying to decide which of these two customers has more fixed assets than the other, relative to their total assets.

Required

1. Prepare a common-size analysis to compare the asset composition of Bhagwan Inc. and Bigwig Ltd.

2. To which company are current assets more important? 

3. Which company places more emphasis on its property, plant, and equipment?

Transcribed Image Text:

Assets (in millions of dollars) Bhagwan Inc. Bigwig Ltd. Current assets Cash and equivalents $ 462 $ 472 Short-term investments 804 Accounts receivable, net 2,898 882 Inventories 2,082 5,380 Other current assets 408 134 Total current assets 5,850 7,672 Property, plant, and equipment, net 4,960 11,280 Goodwill and other intangibles 206 226 Other assets 302 540 Total assets $11,318 $19,718