Selected comparative financial statements of Sugo Company follow.

SUGO COMPANY

Comparative Income Statements

For Years Ended December 31, 2012-2006

($ thousands) 2012 2011 2010 2009 2008 2007 2006

Sales . . . . . . . . . . . . . . . . . . . . . $1,594 $1,396 $1,270 $1,164 $1,086 $1,010 $828

Cost of goods sold . . . . . . . . . 1,146 932 802 702 652 610 486

Gross profit . . . . . . . . . . . . . . . 448 464 468 462 434 400 342

Operating expenses . . . . . . . . 340 266 244 180 156 154 128

Net income . . . . . . . . . . . . . . . $ 108 $ 198 $ 224 $ 282 $ 278 $ 246 $214

SUGO COMPANY

Comparative Balance Sheets

December 31, 2012-2006

($ thousands) 2012 2011 2010 2009 2008 2007 2006

Assets

Cash . . . . . . . . . . . . . . . . . . . . . . . . . $ 68 $ 88 $ 92 $ 94 $ 98 $ 96 $ 99

Accounts receivable, net . . . . . . . . . 480 504 456 350 308 292 206

Merchandise inventory . . . . . . . . . . 1,738 1,264 1,104 932 836 710 515

Other current assets . . . . . . . . . . . . 46 42 24 44 38 38 19

Long-term investments . . . . . . . . . . 0 0 0 136 136 136 136

Plant assets, net . . . . . . . . . . . . . . . . 2,120 2,114 1,852 1,044 1,078 960 825

Total assets . . . . . . . . . . . . . . . . . . . . $4,452 $4,012 $3,528 $2,600 $2,494 $2,232 $1,800

Liabilities and Equity

Current liabilities . . . . . . . . . . . . . . . $1,120 $ 942 $ 618 $ 514 $ 446 $ 422 $ 272

Long-term liabilities . . . . . . . . . . . . . 1,194 1,040 1,012 470 480 520 390

Common stock . . . . . . . . . . . . . . . . 1,000 1,000 1,000 840 840 640 640

Other paid-in capital . . . . . . . . . . . . 250 250 250 180 180 160 160

Retained earnings . . . . . . . . . . . . . . . 888 780 648 596 548 490 338

Total liabilities and equity . . . . . . $4,452 $4,012 $3,528 $2,600 $2,494 $2,232 $1,800

Required

1. Compute trend percents for all components of both statements using 2006 as the base year. (Round percents to one decimal.)

Analysis Component

2. Analyze and comment on the financial statements and trend percents from part 1.