WorldCom
Common Size Balance Sheet
	2000	2001
	$	$
Assets
Current Assets:
Cash & Cash Equivalents	$761	$1,416
Accounts Receivable	$6,815	$5,308
Deferred Tax Asset	$172	$251
Other Current Assets	$2,007	$2,230
Total Current Assets	$9,755	$9,205
Property & Equipment	$37,423	$8,809
Goodwill & Other Assets	$46,594	$50,537
Other Assets	$5,131	$5,363
Total Assets	$98,903	$103,914
Liabilities & Shareholders' Investments
Short Term Debt	$7,200	$172
Accrued Interest	$446	$618
Accounts Payable	$6,022	$4,844
Other Current Liabilities	$4,005	$3,576
Total Current Liabilities	$17,673	$9,210
Long Term Liabilities
Long Term Debts	$17,696	$30,038
Deferred Tax Liability	$3,611	$4,066
Other Liabilities	$1,124	$576
Total Long Term Liabilities	$22,431	$34,680
Commitments & Contingencies
Minority Interest	$2,592	$101
Contingencies	$798	$1,993
Shareholder's Investment	$55,409	$57,930
Total Liabilities	$98,903	$103,914
WorldCom
Common Size Income Statement
	2000	2001
	$	$
Revenues
Operating Expenses
Line Cost	$15,462	$14,739
Selling, General & Administrative	$10,597	$11,046
Depreciation	$4,878	$5,880
Total Revenue	($30,937)	$31,665
Operating Income	$8,153	$3,514
Other Expenses/Income
Interest Expenses	($970)	($1,533)
Miscellaneous Expense	$385	$412
Income before Income Tax
Minority Interest	$7,568	$2,393
Provision for Tax	$3,025	$927
Income before Minority Income Tax	$4,543	$1,466
Minority Interest	($305)	$35
Effect of Alcing Change	($85)
Net Income	$4,153	$1,501

1. What did you learn about the relationship between the income statement and balance sheet?

2. Does your analysis raise any questions that might lead to a fraud hypothesis? Explain.