common-size statements
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questions_2.docxProblem 17-1A Ratios, common-size statements, and trend percents L.O. P1, P2, P3
[The following information applies to the questions displayed below.]
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Selected comparative financial statements of Bennington Company follow: |
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BENNINGTON COMPANY |
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Comparative Income Statements |
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For Years Ended December 31, 2012, 2011, and 2010 |
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2012 |
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2011 |
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2010 |
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Sales |
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$ |
457,083 |
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$ |
350,163 |
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$ |
243,000 |
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Cost of goods sold |
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275,164 |
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219,202 |
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155,520 |
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Gross profit |
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181,919 |
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130,961 |
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87,480 |
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Selling expenses |
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64,906 |
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48,322 |
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32,076 |
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Administrative expenses |
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41,137 |
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30,814 |
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20,169 |
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Total expenses |
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106,043 |
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79,136 |
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52,245 |
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Income before taxes |
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75,876 |
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51,825 |
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35,235 |
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Income taxes |
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14,113 |
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10,624 |
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7,153 |
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Net income |
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$ |
61,763 |
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$ |
41,201 |
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$ |
28,082 |
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BENNINGTON COMPANY |
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Comparative Balance Sheets |
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December 31, 2012, 2011, and 2010 |
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2012 |
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2011 |
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2010 |
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Assets |
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Current assets |
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$ |
47,321 |
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$ |
37,023 |
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$ |
49,491 |
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Long-term investments |
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0 |
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1,200 |
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3,960 |
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Plant assets, net |
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85,231 |
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90,490 |
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53,188 |
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Total assets |
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$ |
132,552 |
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$ |
128,713 |
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$ |
106,639 |
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Liabilities and Equity |
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Current liabilities |
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$ |
19,353 |
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$ |
19,178 |
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$ |
18,662 |
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Common stock |
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71,000 |
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71,000 |
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53,000 |
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Other paid-in capital |
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8,875 |
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8,875 |
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5,889 |
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Retained earnings |
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33,324 |
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29,660 |
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29,088 |
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Total liabilities and equity |
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$ |
132,552 |
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$ |
128,713 |
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$ |
106,639 |
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1.
value: 1.00 points
Problem 17-1A Part 1
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Required: |
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1. |
Compute each year's current ratio. (Round your answers to 1 decimal place.) |
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Current ratio |
December 31, 2012: |
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to |
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Current ratio |
December 31, 2011: |
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to |
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Current ratio |
December 31, 2010: |
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to |
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2.
value: 1.00 points
Problem 17-1A Part 2
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2. |
Express the income statement data in common-size percents. (Percents are rounded to two decimals and thus may not exactly sum to totals and subtotals. Round your answers to 2 decimal places. Omit the "%" sign in your response.) |
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BENNINGTON COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2012, 2011, and 2010 |
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2012 |
2011 |
2010 |
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Sales |
% |
% |
% |
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Cost of goods sold |
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Gross profit |
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Selling expenses |
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Administrative expenses |
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Total expenses |
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Income before taxes |
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Income taxes |
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Net income |
% |
% |
% |
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3.
value: 1.00 points
Problem 17-1A Part 3
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3. |
Express the balance sheet data in trend percents with 2010 as the base year. (Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Omit the "%" sign in your response.) |
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BENNINGTON COMPANY Balance Sheet Data in Trend Percents December 31, 2012, 2011, and 2010 |
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2012 |
2011 |
2010 |
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Assets |
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Current assets |
% |
% |
% |
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Long-term investments |
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Plant assets |
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Total assets |
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Liabilities and Equity |
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Current liabilities |
% |
% |
% |
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Common stock |
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Other contributed capital |
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Retained earnings |
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Total liabilities and equity |
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Problem 17-4A Calculation of financial statement ratios L.O. P3
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Selected year-end financial statements of McCord Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2010, were inventory, $53,900; total assets, $229,400; common stock, $95,000; and retained earnings, $52,348.) |
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McCORD CORPORATION Balance Sheet December 31, 2011 |
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Assets |
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Liabilities and Equity |
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Cash |
$ |
16,000 |
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Accounts payable |
$ |
16,500 |
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Short-term investments |
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8,800 |
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Accrued wages payable |
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4,800 |
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Accounts receivable, net |
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31,400 |
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Income taxes payable |
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3,300 |
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Notes receivable (trade)* |
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4,000 |
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Long-term note payable, secured |
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Merchandise inventory |
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32,150 |
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by mortgage on plant assets |
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65,400 |
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Prepaid expenses |
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3,050 |
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Common stock |
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95,000 |
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Plant assets, net |
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153,300 |
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Retained earnings |
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63,700 |
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Total assets |
$ |
248,700 |
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Total liabilities and equity |
$ |
248,700 |
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* These are short-term notes receivable arising from customer (trade) sales. |
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Required: |
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Compute the following. (Use 365 days a year. Do not round intermediate calculations and round your final answers to 1 decimal place. Omit the "%" sign in your response): |
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(1) |
Current ratio |
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to |
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(2) |
Acid-test ratio |
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to |
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(3) |
Days' sales uncollected (including note) |
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days |
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(4) |
Inventory turnover |
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times |
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(5) |
Days' sales in inventory |
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days |
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(6) |
Debt-to-equity ratio |
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to |
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(7) |
Times interest earned |
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times |
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(8) |
Profit margin ratio |
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% |
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(9) |
Total asset turnover |
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times |
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(10) |
Return on total assets |
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% |
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(11) |
Return on common stockholders' equity |
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% |
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