EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,780 million. On December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current assets. The company’s balance sheets and income statements reported the following amounts:

1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose.

2. What were the company’s total assets on December 31, 2018? Evaluate the company’s leverage and debt ratios at the end of 2017 and 2018. Use year-end figures in place of averages were needed for calculating the ratios in this exercise. Did the company improve, deteriorate, or remain about the same over the year?

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A1 1 At year-end (In millions) 2 Liabilities and stockholders' equity 3 Current liabilities 2018 2017 Accounts payable Accrued expenses Employee compensation and benefits 7 $ 148 149 14 3 314 1,485 134 5 $ 184 177 30 20 411 4 Current portion of long-term debt 8 Total current liabilities 9 Long-term bonds payable 10 Deferred income taxes payable 11 Leases payable 12 Common stockholders' equity 13 Total liabilities and stockholders' equity 1,313 131 23 1,844 $3,782 1,584 $ 3,462 Year-end (in millions) 15 Cost of goods sold 16 14 $ 2,656 $ 2,046 A1 1 At year-end (In millions) 2 Liabilities and stockholders' equity 3 Current liabilities 2018 2017 Accounts payable Accrued expenses Employee compensation and benefits 7 $ 148 149 14 3 314 1,485 134 5 $ 184 177 30 20 411 4 Current portion of long-term debt 8 Total current liabilities 9 Long-term bonds payable 10 Deferred income taxes payable 11 Leases payable 12 Common stockholders' equity 13 Total liabilities and stockholders' equity 1,313 131 23 1,844 $3,782 1,584 $ 3,462 Year-end (in millions) 15 Cost of goods sold 16 14 $ 2,656 $ 2,046

Answer rating: 100% (QA)

1 Longterm bonds payable is that the amount that the corporate expects to pay aft... View the full answer