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Extreme Sports Nutrition's Balance Sheet

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A current liability on Extreme Sports Nutrition’s balance sheet is made up of accounts payable. Accounts payable is the company’s responsibility to pay off their on-going short-term debt to their creditors or suppliers. Other current liabilities listed on the balance sheet are customer deposits and accrued expenses. An accrued expense is when goods and services have already been delivered, but not yet billed, and now it is the company’s obligation to pay off their expenses in the future. Customer deposits are prepayments made by customers; an example would be selling tickets in advance. Once the customer does this, it becomes the company’s obligation to provide the service in the future or return the money. In 2010, accounts payable had a percentage …show more content…

A long-term liability is a debt or obligation that is not due within a year of the date on the balance sheet or the company’s operating cycle. Extreme Sports Nutrition had a low ratio rate of 30.1218% in 2010, meaning that in that year, the company was using a low amount of leverage and their equity position was strong. In 2011 there was a major spike in their long-term liabilities ratio of 30.7535%. By 2012, Extreme Sports Nutrition managed to reduce the ratio back down to 30.1343%. The company had a small ratio increase of 30.2477% in 2013, but then deceased in 2014 to 29.9587. The company’s lowest percentage on long-term liabilities was in 2014, meaning that they were using a very low amount of leverage and this is they year where their equity level was …show more content…

Common stock, additional paid-in capital, and retained earnings are what the equity in this balance sheet consists of. Common stock represents ownership in a corporation. Additional paid-in capital is an account that represents excess money paid by an investor over the par-value price of a stock issue. When issuing common stock, additional paid-in capital can arise. The ratio rate of common stock in 2010 was 0.7530% and the additional paid in capital rate was 2.2591%. Common stock ratio rate decreased in 2011 to 0.6834%, meaning that the additional paid-in capital also lowered to a ratio rate of 2.0502%. Another decreased happened in 2012, the additional paid-in capital ratio rate declined to 1.8081% because common stock also decreased to a percentage of 0.6027%. In 2013, the common stock ratio went down 0.5500% and additional paid-in capital declined to 1.6499%. The year 2014 was when the company’s common stock and additional paid-in capital were at their lowest, with a common stock ratio of 0.4993% and an additional paid-in capital ratio rate of 1.4979%. As you can see from looking at the chart, while common stock and additional paid in capital are declining year after year, retained earnings are increasing. Retained earnings are a percentage of net earnings that are not paid out as dividends but are saved by the company to be reinvested in its core business or used to pay their debts. The ratio rate of

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