Based on the common-size balance sheet data provided, here's an analysis of positive or negative
income statement trends over the five-year period (2018-2022):
**Positive Trends in Assets (Indicating Growth):**
1. **Cash and Cash Equivalents:** The percentage of cash and cash equivalents as a part of total assets
increased from 18.6% in 2018 to 33.7% in 2021 before slightly decreasing to 32.8% in 2022. This
suggests a significant growth in liquidity over the five-year period. The company might have built up
cash reserves or improved cash management.
2. **Accounts and Notes Receivable - Net:** This category shows a gradual increase from 3.8% in 2018
to 4.5% in 2019 and further to 4.0% in 2022. This could indicate an increase in sales or better
management of receivables.
3. **Inventories:** There is a decreasing trend from 15.2% in 2018 to 11.8% in 2022, suggesting
improved inventory turnover and efficiency in managing inventory levels.
4. **Current Assets:** Current assets as a percentage of total assets increased from 40.4% in 2018 to
48.2% in 2021 and 49.9% in 2022, indicating better liquidity.
5. **Goodwill:** After a decline in 2019 and 2020, there was an increase from 5.4% in 2021 to 10.4% in
2022. This could suggest stability or potential acquisitions.
**Negative Trends in Assets (Indicating Reduction):**
1. **Equity and Cost Investments:** This category decreased from 30.2% in 2018 to 16.9% in 2022,
suggesting divestment or depreciation in equity investments.
2. **Property, Plant, and Equipment - At Cost:** There's a substantial decrease from 82.1% in 2018 to
42.9% in 2022, indicating a significant reduction in capital expenditures or asset sales.
3. **Accumulated Depreciation:** Accumulated depreciation as a percentage of total assets improved
from -46.6% in 2018 to -26.1% in 2022, potentially due to more efficient depreciation management.
**Positive Trends in Liabilities and Equities (Indicating Growth):**
1. **Common Stock + Additional Paid-in Capital:** This category shows consistent growth, increasing
from 10.1% in 2018 to 17.0% in 2022, suggesting successful capital raising.
2. **Accumulated Other Comprehensive Income (Loss):** There is an increasing trend from 0.3% in
2018 to 1.3% in 2022, indicating improvements in comprehensive income.
3. **Total Common Shareholders' Equity:** Despite fluctuations, there is an overall upward trend,
suggesting improved common shareholders' equity relative to total liabilities and equities.
**Negative Trends in Liabilities and Equities (Indicating Reduction):**
1. **Retained Earnings (Deficit):** This category has a negative trend from -17.6% in 2018 to -29.9% in
2022, indicating a reduction in retained earnings.
2. **<Treasury Stock> and Other Equity Adjustments:** There's a consistent decrease from -2.0% in
2018 to -13.6% in 2022, possibly due to repurchases of treasury stock or other equity adjustments.
**Overall Assessment:**
The company has exhibited a strong cash position, improved liquidity, and better management of
receivables. However, it has reduced equity investments and significantly cut capital expenditures,
which could impact future growth opportunities. The fluctuations in goodwill may signify changes in the
company's acquisition strategy. Additionally, while there is a positive trend in common equity, retained
earnings and equity adjustments reflect areas of concern that need further analysis to understand the
company's financial health comprehensively.
Analyzing the common-size balance sheet data, here's an assessment of the positive and negative
balance sheet trends over the five-year period (2018-2022):
**Positive Balance Sheet Trends (Indicating Growth):**
1. **Cash and Cash Equivalents:** There is a positive trend in cash and cash equivalents as a percentage
of total assets. This percentage increased from 18.6% in 2018 to 33.7% in 2021 and slightly decreased to
32.8% in 2022. This indicates significant growth in liquidity and the ability to manage short-term
obligations effectively.
2. **Common Stock + Additional Paid-in Capital:** This category shows consistent growth, increasing
from 10.1% in 2018 to 17.0% in 2022. The growth suggests that the company has been successful in
raising capital from common shareholders.
3. **Accumulated Other Comprehensive Income (Loss):** There is an increasing trend in accumulated
other comprehensive income, rising from 0.3% in 2018 to 1.3% in 2022. This demonstrates
improvements in comprehensive income.
**Negative Balance Sheet Trends (Indicating Reduction):**
1. **Total Common Shareholders' Equity:** Total common shareholders' equity as a percentage of total
liabilities and equities declined from -9.2% in 2018 to -25.2% in 2022, indicating a significant reduction.
This suggests that the company may have incurred losses or distributed more dividends than generating
profits.
2. **Property, Plant, and Equipment - At Cost:** The percentage of property, plant, and equipment
relative to total assets decreased from 82.1% in 2018 to 42.9% in 2022. This reduction could indicate
either the sale of assets or a decrease in capital expenditures.
3. **Goodwill:** Goodwill percentage initially decreased from 16.5% in 2018 to 5.4% in 2021 but then
increased to 10.4% in 2022. This suggests fluctuations in the company's goodwill due to potential
acquisitions or changes in business strategy.
4. **Long-Term Debt:** The proportion of long-term debt to total assets grew from 70.0% in 2018 to
80.6% in 2022, indicating increased reliance on long-term debt for financing.
5. **Retained Earnings (Deficit):** Retained earnings percentage as part of total equity followed a
negative trend from -17.6% in 2018 to -29.9% in 2022. This could imply losses or significant dividend
payouts.
6. **<Treasury Stock> and Other Equity Adjustments:** This category experienced a negative trend,
decreasing from -2.0% in 2018 to -13.6% in 2022. This may be due to treasury stock repurchases or
adjustments that reduce equity.
**Overall Assessment:**
The company has exhibited strengths in improving liquidity, raising capital from common shareholders,
and enhancing comprehensive income. However, there are concerns related to a significant reduction in
common shareholders' equity, increased reliance on long-term debt, and negative trends in property,
plant, and equipment. It is crucial to further investigate the reasons behind these negative trends and
assess their implications for the company's financial health and performance.