Question
Problem 13-2A Ratios, common-size statements, and trend percents LO P1, P2, P3 [The following information applies to the questions displayed below.] Selected comparative financial statements
Problem 13-2A Ratios, common-size statements, and trend percents LO P1, P2, P3
[The following information applies to the questions displayed below.] Selected comparative financial statements of Korbin Company follow:
KORBIN COMPANY | |||||||||
Comparative Income Statements | |||||||||
For Years Ended December 31, 2017, 2016, and 2015 | |||||||||
2017 | 2016 | 2015 | |||||||
Sales | $ | 496,208 | $ | 380,136 | $ | 263,800 | |||
Cost of goods sold | 298,717 | 237,965 | 168,832 | ||||||
Gross profit | 197,491 | 142,171 | 94,968 | ||||||
Selling expenses | 70,462 | 52,459 | 34,822 | ||||||
Administrative expenses | 44,659 | 33,452 | 21,895 | ||||||
Total expenses | 115,121 | 85,911 | 56,717 | ||||||
Income before taxes | 82,370 | 56,260 | 38,251 | ||||||
Income taxes | 15,321 | 11,533 | 7,765 | ||||||
Net income | $ | 67,049 | $ | 44,727 | $ | 30,486 | |||
KORBIN COMPANY | |||||||||
Comparative Balance Sheets | |||||||||
December 31, 2017, 2016, and 2015 | |||||||||
2017 | 2016 | 2015 | |||||||
Assets | |||||||||
Current assets | $ | 52,317 | $ | 40,932 | $ | 54,716 | |||
Long-term investments | 0 | 900 | 4,290 | ||||||
Plant assets, net | 100,212 | 106,279 | 63,704 | ||||||
Total assets | $ | 152,529 | $ | 148,111 | $ | 122,710 | |||
Liabilities and Equity | |||||||||
Current liabilities | $ | 22,269 | $ | 22,069 | $ | 21,474 | |||
Common stock | 67,000 | 67,000 | 49,000 | ||||||
Other paid-in capital | 8,375 | 8,375 | 5,444 | ||||||
Retained earnings | 54,885 | 50,667 | 46,792 | ||||||
Total liabilities and equity | $ | 152,529 | $ | 148,111 | $ | 122,710 | |||
Problem 13-2A Part 1
Required: 1. Complete the below table to calculate each year's current ratio.
2. Complete the below table to calculate income statement data in common-size percents. (Round your percentage answers to 2 decimal places.)
For each ratio listed, identify whether the change in ratio value from 2016 to 2017 is usually regarded as favorable or unfavorable.
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