Ratios, common-size statements, and trend percents

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Problem 13-1A: Ratios, common-size statements, and trend percents

Selected comparative financial statements of Korbin Company follow:
KORBIN Company
Comparative Income Statements
For Years Ended December 31, 2009, 2008, and 2007
2009 2008 2007

Sales $430,185 $329,557 $228,700
Cost of goods sold 258,971 207,291 146,368
Gross Profit $171,214 $122,266 $82,332
Selling expenses 61,086 45,479 30,188
Administrative expenses 38,717 29,001 18,982
Total expenses $99,803 $74,480 $49,170
Income before taxes $71,411 $47,786 $33,162
Income taxes 13,282 9,796 6,732
Net income $58,129 $37,990 $26,430

KORBIN Company
Comparative Balance Sheets
December 31, 2009, 2008, and 2007
2009 2008 2007

Assets
Current assets $45,403 $36,972 $47,969
Long-term investments 0 700 4,850
Plant assets, net 86,967 90,864 53,673
Total assets $132,370 $128,536 $106,492

Liabilities and Equity
Current liabilities $19,326 $19,152 $18,636
Common stock 67,000 67,000 49,000
Other paid-in capital 8,375 8,375 5,444
Retained earnings 37,669 34,009 33,412
Total liabilities and equity $132,370 $128,536 $106,492
Required:
1. Compute each year's current ratio. (Round your answer to 1 decimal place.)
2. Express the income statement data in common-size percents.
3. Express the balance sheet data in trend percents with 2007 as the base year.

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Solution Summary

Calculates current ratio, expresses the income statement data in common-size percents and the balance sheet data in trend percents with 2007 as the base year.