Longs Jewelers
Balance Sheet
For the Years Ending June 30, 20x1, 20x2, 20x3 and 20x4
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20x1
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20x2
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20x3
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20x4
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Current Assets
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Cash
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$-4,824
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$413
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$-4,150
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$7,637
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Accounts Receivable
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7,886
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6,100
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5,000
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4,368
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Inventory
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186,450
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188,237
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111,455
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99,351
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Total Current Assets
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189,512
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194,750
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112,305
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111,356
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Long-Term Assets
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Equipment
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139,497
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150,790
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149,332
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152,942
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Less Accumulated Depreciation
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-63,592
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-82,639
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-99,311
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-116,049
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Equipment (net)
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75,905
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68,151
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50,021
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36,893
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Other Assets
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1,458
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1,458
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Total Long-Term Assets
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75,905
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68,151
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51,479
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38,351
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Total Assets
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$265,417
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$262,901
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$163,784
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$149,707
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Current Liabilities
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Accounts Payable
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$151,743
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$140,000
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$140,000
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$141,328
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Long-Term Liabilities
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Loans from Shareholders
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19,471
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17,200
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16,200
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44,177
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Notes Payable
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206,377
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201,846
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133,436
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70,684
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Total Long-Term Liabilities
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225,848
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219,046
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149,636
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114,861
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Total Liabilities
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377,591
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359,046
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289,636
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256,189
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Common Equity
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Common Stock
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1,000
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1,000
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1,000
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1,000
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Retained Earnings*
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-113,174
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-97,145
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-126,852
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-107,482
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Total Equity
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-112,174
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-96,145
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-125,852
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-106,482
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Total Liabilities and Equity
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$265,417
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$262,901
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$163,784
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$149,707
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*Prior period adjustments made
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to balance in retained earnings
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-6,417
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1,669
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Longs Jewelers
Discussion Questions
1. Complete a financial analysis of Longs Jewelers including a cash flow statement and ratio analysis and discuss your findings.
2. Identify critical non-quantitative issues that should be considered in the decision process.
3. What risk factors should Bob be most concerned about regarding his decision?
4. Identify possible ethical or values-based issues that could impact any decision.
5. What should Bob and Bonnie do?