EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2021 revenues totaled $2,780 million. At December 31, 2021 and 2020, the company had, respectively, $656 million and $591 million in current assets. The December 31, 2021 and 2020, balance sheets and income statements reported the following amounts: 

Requirements 

1. Describe each of Enviro Friend Structures, Inc.’s, liabilities and state how the liability arose.

2. What were the company’s total assets at December 31, 2021?

3. Assume that beginning and ending inventories for both periods did not differ by a material amount. Accounts payable at the end of 2019 was $188 million. Calculate accounts payable turnover as a ratio and days’ payable outstanding (DPO) for 2020 and 2021. Calculate current ratios for 2020 and 2021 as well. Evaluate whether the company improved or deteriorated from the standpoint of its ability to cover accounts payable and current liabilities over the year.

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1 At year-end (In millions) 2 3 4 5 A1 7 8 Liabilities and stockholders' equity Current liabilities Accounts payable Accrued expenses 6 Accrued employee compensation and benefits Current portion of long-term debt Total current liabilities Long-term debt 9 10 Post-retirement benefits payable 11 Other liabilities 12 Total stockholders' equity 13 14 15 16 Total liabilities and stockholders' equity Year-end (in millions) Cost of goods sold B 2021 $ 148 149 14 3 314 1,485 134 5 1,844 $3,782 $ 2,656 2020 $184 177 30 20 411 1,313 131 23 1,584 $3,462 $2,046