Required information

Problem 17-2A Ratios, common-size statements, and trend percents LO P1, P2, P3

[The following information applies to the questions displayed below.] Selected comparative financial statements of Korbin Company follow.

KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2019, 2018, and 2017
	2019			2018			2017
Sales	$	542,104		$	415,296		$	288,200
Cost of goods sold		326,347			259,560			184,448
Gross profit		215,757			155,736			103,752
Selling expenses		76,979			57,311			38,042
Administrative expenses		48,789			36,546			23,921
Total expenses		125,768			93,857			61,963
Income before taxes		89,989			61,879			41,789
Income tax expense		16,738			12,685			8,483
Net income	$	73,251		$	49,194		$	33,306

KORBIN COMPANY
Comparative Balance Sheets
December 31, 2019, 2018, and 2017
	2019			2018			2017
Assets
Current assets	$	61,388		$	41,087		$	54,924
Long-term investments		0			1,200			4,200
Plant assets, net		114,007			103,412			61,588
Total assets	$	175,395		$	145,699		$	120,712
Liabilities and Equity
Current liabilities	$	25,608		$	21,709		$	21,125
Common stock		70,000			70,000			52,000
Other paid-in capital		8,750			8,750			5,778
Retained earnings		71,037			45,240			41,809
Total liabilities and equity	$	175,395		$	145,699		$	120,712

Problem 17-2A Part 1

Required: 1. Complete the below table to calculate each year's current ratio.

Current Ratio
	Choose Numerator:	/	Choose Denominator:	=	Current ratio
		/		=	Current ratio
2019		/		=		to 1
2018		/		=		to 1
2017		/		=		to 1

Problem 17-2A Part 2

2. Complete the below table to calculate income statement data in common-size percents. (Round your percentage answers to 2 decimal places.)

KORBIN COMPANY
Common-Size Comparative Income Statements
For Years Ended December 31, 2019, 2018, and 2017
	2019		2018		2017
Sales		%		%		%
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total expenses
Income before taxes
Income tax expense
Net income		%		%		%

Problem 17-2A Part 3

3. Complete the below table to calculate the balance sheet data in trend percents with 2017 as the base year. (Round your percentage answers to 2 decimal places.)

KORBIN COMPANY
Balance Sheet Data in Trend Percents
December 31, 2019, 2018 and 2017
	2019		2018		2017
Assets
Current assets		%		%	100.00	%
Long-term investments					100.00
Plant assets, net					100.00
Total assets		%		%	100.00	%
Liabilities and Equity
Current liabilities		%		%	100.00	%
Common stock					100.00
Other paid-in capital					100.00
Retained earnings					100.00
Total liabilities and equity		%		%	100.00	%

Problem 17-2A Part 4

4. Refer to the results from parts 1, 2, and 3. (a) Did the cost of goods sold make up a greater portion of sales for the most recent year?

multiple choice 1

• Yes

• No

(b) Did income as a percent of sales improve in the most recent year?

multiple choice 2

• Yes

• No

(c) Did plant assets grow over this period?

multiple choice 3

• Yes

• No