1. Application exercise, vertical modules
Module 1. THE BALANCE SHEET
Here is the balance sheet for Air Liquide in 2015 and 2016. You have to build the financial balance sheet and interpret it.
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Question 1 of 8
1. Question
Calculate the working capital requirement (WCR) as the difference between current operating assets and current operating liabilities.
CorrectIncorrectHint
WCR = inventories + trade accounts receivable + other current assets – trade accounts payable – other current liabilities
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Question 2 of 8
2. Question
Calculate the capital employed = non-current assets + WCR – other non-current liabilities
CorrectIncorrectHint
Don’t forget to deduct the other non-current liabilities in the calculation.
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Question 3 of 8
3. Question
Calculate the net financial debt (current + non-current financial debt, net of cash) and the net financial resources.
Check that capital employed equals net financial resources.
CorrectIncorrectHint
Cash must be deducted from the sum of current and non-current financial debt; don’t confuse non-current liabilities and non-current financial debt.
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Question 4 of 8
4. Question
Calculate the working capital (WC) as the difference between long-term resources and non-current assets.
CorrectIncorrectHint
Don’t forget the other non-current liabilities in the long-term resources, as well as the non-current financial debt
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Question 5 of 8
5. Question
Use two different methods to calculate the net cash position:
- Net cash position = WC – WCR
- Net cash position = cash – current financial debt
Make sure that you get the same figure.
CorrectIncorrectHint
Remember, you deduct the current financial debt from cash.
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Question 6 of 8
6. Question
A little bit of interpretation…
How do you interpret the increase in the goodwill in 2016?
CorrectIncorrectHint
Goodwill is a non-current asset
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Question 7 of 8
7. Question
A little bit of interpretation…
This ‘strategic move’ actually cost $12.5bn. How did the company finance the operation?
CorrectIncorrectHint
Which financial resource was predominantly mobilized?
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Question 8 of 8
8. Question
The firm issued capital for an amount of 3.3bn€. How do you explain that shareholders’ equity increased by more than 4bn€?
CorrectIncorrectHint
Shareholders’ equity represents the contribution of shareholders to the financing of the company, net of what was distributed to them