Reference no: EM131922898
Problem - Ratios, common-size statements, and trend percents
Selected comparative financial statements of Bennington Company follow:
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BENNINGTON COMPANY Comparative Income Statements 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
|
155,520
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Gross profit
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181,919
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130,961
|
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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461,763
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$41,201
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$28,082
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BENNINGTON COMPANY Comparative Balance Sheets 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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|
|
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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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Required:
1. Compute each year's current ratio.
2. Express the income statement data in common-size percents.
3. Express the balance sheet data in trend percents with 2010 as the base year.
Problem - Calculation of financial statement ratios
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 Income Statement
For Year Ended December 31, 2011
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Sales
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$450,600
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Cost of goods sold
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297,450
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Gross profit
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153,150
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Operating expenses
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99,500
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Interest expense
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3,900
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Income before taxes
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49,750
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Income taxes
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20,041
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Net income
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$29,709
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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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|
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Cash
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$16,000
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Accounts payable
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$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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|
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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
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$248,700
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Total liabilities and equity
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$248,700
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* These are short-term notes receivable arising from customer (trade) sales.
Required: Compute the following.
(1) Current ratio
(2) Acid-test ratio
(3) Days' sales uncollected (including note)
(4) Inventory turnover
(5) Days' sales in inventory
(6) Debt-to-equity ratio
(7) Times interest earned
(8) Profit margin ratio
(9) Total asset turnover
(10) Return on total assets
(11) Return on common stockholders' equity