Selected comparative financial statements of Korbin Company follow.
Required
1. Compute each year’s current ratio. (Round ratio amounts to one decimal.)
2. Express the income statement data in common- size percents. (Round percents to two decimals.)
3. Express the balance sheet data in trend percents with 2012 as the base year. (Round percents to two decimals.)
Analysis Component
4. Comment on any significant relations revealed by the ratios and percentscomputed.
Solution
Answer1: Current Ratio =Current Asset/Current Liability
2012=$51748/$20300=2.55 times
2013=$37924/$19960=1.9 times
2014=$52390/$22800=2.30 times
Answer:2 Common size income statement
Answer:3
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Selected comparative financial statements of Korbin Company follow- R.docx
1. Selected comparative financial statements of Korbin Company follow.
Required
1. Compute each year’s current ratio. (Round ratio amounts to one decimal.)
2. Express the income statement data in common- size percents. (Round percents to two
decimals.)
3. Express the balance sheet data in trend percents with 2012 as the base year. (Round percents
to two decimals.)
Analysis Component
4. Comment on any significant relations revealed by the ratios and percentscomputed.
Solution
Answer1: Current Ratio =Current Asset/Current Liability
2012=$51748/$20300=2.55 times
2013=$37924/$19960=1.9 times
2014=$52390/$22800=2.30 times
Answer:2 Common size income statement
Answer:3
2014 2013 2012
Particulars Amount ($) % Amount ($) % Amount ($) %
Sales 555000 100 340000 100 278000 100
COGS 283500 51.08108 212500 62.5 153900 55.35971
Gross profit 271500 48.91892 127500 37.5 124100 44.64029
Selling expenses 102900 18.54054 46920 13.8 50800 18.27338
Administration expenses 50668 9.129369 29920 8.8 22800 8.201439
Total expenses 153568 27.66991 76840 22.6 73600 26.47482
2. income before taxes 117932 21.24901 50660 14.9 50500 18.16547
income taxes 40800 7.351351 10370 3.05 15670 5.636691
Net income 77132 13.89766 40290 11.85 34830 12.52878