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Logitech Case Study Solution

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1. Using the Consolidated Balance Sheets for Logitech International S.A. (Logitech) for March 31, 2010 and 2009, prepare a common-size balance sheet.

Statement of financial position

2010

2009

Assets
Total
% of total assets
Total
% of total asset
Current assets

Cash and equivalents
$319,944.00
20.00%
$492,759.00
34.66%
Short-term investments

$1,637.00
0.12%
Account receivable
$195,247.00
12.21%
$213,929.00
15.05%
Inventories
$219,593.00
13.73%
$233,467.00
16.42%
Other current assets
$58,877.00
3.68%
$56,884.00
4.00%
Total current assets
$793,661.00
49.61%
$998,676.00
70.25%
Property plant and equiptment
$91,229.00
5.70%
$104,132.00
7.33%
Goodwill
$553,462.00
34.60%
$242,909.00
17.09%
Other intangible assets
$95,396.00 …show more content…

have total liabilities of 37.51% with respect to the total asset of the company. It imply around the ratio of debt to assets is 3:10 in 2010.
In 2009, the debt-assets ratio was 29.81%. It imply the debt-asset ratio of the company have an increase of 7.7% from 2009 to 2010.
For Total shareholder equity- asset ratio, the company have decrease of 70.19% in 2009 to 62.49% in 2010.

3. Analyze accounts receivable and allowance for doubtful accounts.

The allowance for doubtful accounts is upheld for the client who have low credibility. Account receivable is money or outstanding invoice owned from the customers. The credit is due within a short period of time usually within a year. The amount of money is subtracted from accounts receivable. However, there is no bad debt happened in Logitech because no subtraction has been made in this year.

4. What inventory method is used to value inventories? Does this method reflect current cost at year-end?

The inventory method of FIFO(First In First Out) is used to value inventories. However, this cost is matched with the lower cost and market cost from both of them is applied to the compute of inventory …show more content…

The expense of rent was 16.3 million, 15.5 million and 13.8 million for the year 2010,2009 and 2008 respectively. These item is important and required for the company to paid because Logitech reach into agreement and contracts that are not shown in the balance sheet. However, it is important from the view of the stakeholders of the company.

6. Explain what has caused the change in the retained earnings account from March 31, 2009 to March 31, 2010.

The change in the retained earning account from March 31, 2009 to March 31, 2010 is because Logitech has not compensate dividends to the shareholder of the company during the year. The company kept that part of income to reinvest to the company.

7. Discuss any positive items learned about Logitech from the balance sheet and excerpts from the Form 10-K.

The positive items learned about Logitech from the balance sheet and excerpts from the Form 10-K is that the company has depend more on equity than debt due to the company has less debt in the

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