Page 57 - Financial Statement Analysis

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34 Financial Statement Analysis

Exhibit 1.13 Colgate’s Common-Size Balance Sheets

2006 2005 2004 2003 2002

Assets
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . 5.4 4.0 3.7 3.6 2.4
Receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 15.4 15.2 16.3 16.2
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.0 10.1 9.7 9.3 9.5
Other current assets . . . . . . . . . . . . . . . . . . . . . . . 3.1 3.0 2.9 3.9 3.4
Total current assets . . . . . . . . . . . . . . . . . . . . . 36.1 32.4 31.6 33.4 31.4
Property, plant, and equipment, net . . . . . . . . . . . 29.5 29.9 30.5 34.0 35.2
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8 21.7 21.8 17.4 16.7
Other intangible assets, net . . . . . . . . . . . . . . . . . 9.1 9.2 9.6 8.0 8.6
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 6.8 6.5 7.3 8.1
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 100.0 100.0
Liabilities and Shareholders’ Equity
Current liabilities
Notes and loans payable . . . . . . . . . . . . . . . . . . . 1.9 2.0 1.5 1.4 1.3
Current portion of long-term debt . . . . . . . . . . . . 8.5 4.2 5.2 4.2 4.2
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 10.3 10.0 10.1 10.3
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . 1.8 2.5 1.8 2.5 1.7
Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4 13.2 13.0 14.6 12.8
Total current liabilities . . . . . . . . . . . . . . . . . . . 38.4 32.2 31.5 32.7 30.3
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 29.8 34.3 35.6 35.9 45.3
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 3.4 6.5 5.9 6.1 6.9
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4 9.9 12.7 13.4 12.5
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 84.6 84.1 85.6 88.3 95.1

Shareholders’ Equity
Preferred stock...................................................... 2.4 3.0 3.2 3.9 4.6
Common stock....................................................... 8.0 8.6 8.5 9.8 10.3
Additional paid-in capital..................................... 13.3 12.5 12.6 15.1 16.0
Retained earnings................................................. 105.5 105.4 94.8 99.4 91.8
Accumulated other comprehensive income . . . . . . (22.8) (21.2) (20.8) (25.0) (26.3)
Unearned compensation . . . . . . . . . . . . . . . . . . . . (2.8) (3.3) (3.5) (4.4) (4.8)
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . (88.4) (89.1) (80.3) (86.9) (86.8)
Total shareholders’ equity . . . . . . . . . . . . . . . . 15.4 15.9 14.4 11.7 4.9
Total liabilities and shareholders’ equity . . . . . 100.0 100.0 100.0 100.0 100.0

operation, its interpretation is more complex. To be meaningful, a ratio must refer to an
economically important relation. For example, there is a direct and crucial relation be-
tween an item’s sales price and its cost. Accordingly, the ratio of cost of goods sold to
sales is important. In contrast, there is no obvious relation between freight costs and the
balance of marketable securities. The example in Illustration 1.4 highlights this point.