Problem 17-1A Ratios, common-size statements, and trend percents L.O. P1, P2, P3
[The following information applies to the questions displayed below.]
Selected comparative financial statements of Bennington Company follow:
| BENNINGTON COMPANY | ||||||||||||
| Comparative Income Statements | ||||||||||||
| For Years Ended December 31, 2012, 2011, and 2010 | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||
| Sales | $ | 457,083 | $ | 350,163 | $ | 243,000 | ||||||
| Cost of goods sold | 275,164 | 219,202 | 155,520 | |||||||||
| Gross profit | 181,919 | 130,961 | 87,480 | |||||||||
| Selling expenses | 64,906 | 48,322 | 32,076 | |||||||||
| Administrative expenses | 41,137 | 30,814 | 20,169 | |||||||||
| Total expenses | 106,043 | 79,136 | 52,245 | |||||||||
| Income before taxes | 75,876 | 51,825 | 35,235 | |||||||||
| Income taxes | 14,113 | 10,624 | 7,153 | |||||||||
| Net income | $ | 61,763 | $ | 41,201 | $ | 28,082 | ||||||
| BENNINGTON COMPANY | ||||||||||||
| Comparative Balance Sheets | ||||||||||||
| December 31, 2012, 2011, and 2010 | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||
| Assets | ||||||||||||
| Current assets | $ | 47,321 | $ | 37,023 | $ | 49,491 | ||||||
| Long-term investments | 0 | 1,200 | 3,960 | |||||||||
| Plant assets, net | 85,231 | 90,490 | 53,188 | |||||||||
| Total assets | $ | 132,552 | $ | 128,713 | $ | 106,639 | ||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities | $ | 19,353 | $ | 19,178 | $ | 18,662 | ||||||
| Common stock | 71,000 | 71,000 | 53,000 | |||||||||
| Other paid-in capital | 8,875 | 8,875 | 5,889 | |||||||||
| Retained earnings | 33,324 | 29,660 | 29,088 | |||||||||
| Total liabilities and equity | $ | 132,552 | $ | 128,713 | $ | 106,639 | ||||||
references
value:
1.00 points
Problem 17-1A Part 1
Required:
Compute each year’s current ratio. (Round your answers to 1 decimal place.)
| Current ratio | December 31, 2012: | to |
| Current ratio | December 31, 2011: | to |
| Current ratio | December 31, 2010: | to |
eBook Links (3)references
value:
1.00 points
Problem 17-1A Part 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.)
| BENNINGTON COMPANY | |||||
| 2012 | 2011 | 2010 | |||
| Sales | % | % | % | ||
| Cost of goods sold | |||||
| Gross profit | |||||
| Selling expenses | |||||
| Administrative expenses | |||||
| Total expenses | |||||
| Income before taxes | |||||
| Income taxes | |||||
| Net income | % | % | % | ||
eBook Links (3)references
value:
1.00 points
Problem 17-1A Part 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.)
| BENNINGTON COMPANY | |||
| 2012 | 2011 | 2010 | |
| Assets | |||
| Current assets | % | % | % |
| Long-term investments | |||
| Plant assets | |||
| Total assets | |||
| Liabilities and Equity | |||
| Current liabilities | % | % | % |
| Common stock | |||
| Other contributed capital | |||
| Retained earnings | |||
| Total liabilities and equity | |||
eBook Links (3)references
Problem 17-4A Calculation of financial statement ratios L.O. P3
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.)
| McCORD CORPORATION | ||
| Sales | $ | 450,600 |
| Cost of goods sold | 297,450 | |
| Gross profit | 153,150 | |
| Operating expenses | 99,500 | |
| Interest expense | 3,900 | |
| Income before taxes | 49,750 | |
| Income taxes | 20,041 | |
| Net income | $ | 29,709 |
| McCORD CORPORATION | ||||||
| Assets | Liabilities and Equity | |||||
| Cash | $ | 16,000 | Accounts payable | $ | 16,500 | |
| Short-term investments | 8,800 | Accrued wages payable | 4,800 | |||
| Accounts receivable, net | 31,400 | Income taxes payable | 3,300 | |||
| Notes receivable (trade)* | 4,000 | Long-term note payable, secured | ||||
| Merchandise inventory | 32,150 | by mortgage on plant assets | 65,400 | |||
| Prepaid expenses | 3,050 | Common stock | 95,000 | |||
| Plant assets, net | 153,300 | Retained earnings | 63,700 | |||
| Total assets | $ | 248,700 | Total liabilities and equity | $ | 248,700 | |
* These are short-term notes receivable arising from customer (trade) sales.
Required:
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):
| (1) | Current ratio | to |
| (2) | Acid-test ratio | to |
| (3) | Days’ sales uncollected (including note) | days |
| (4) | Inventory turnover | times |
| (5) | Days’ sales in inventory | days |
| (6) | Debt-to-equity ratio | to |
| (7) | Times interest earned | times |
| (8) | Profit margin ratio | % |
| (9) | Total asset turnover | times |
| (10) | Return on total assets | % |
| (11) | Return on common stockholders’ equity | % |
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