Question 1
| KORBIN COMPANY | ||||||||||||
| Comparative Income Statements | ||||||||||||
| For Years Ended December 31, 2016, 2015, and 2014 | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| Sales | $ | 450,688 | $ | 345,264 | $ | 239,600 | ||||||
| Cost of goods sold | 271,314 | 218,207 | 153,344 | |||||||||
| Gross profit | 179,374 | 127,057 | 86,256 | |||||||||
| Selling expenses | 63,998 | 47,646 | 31,627 | |||||||||
| Administrative expenses | 40,562 | 30,383 | 19,887 | |||||||||
| Total expenses | 104,560 | 78,029 | 51,514 | |||||||||
| Income before taxes | 74,814 | 49,028 | 34,742 | |||||||||
| Income taxes | 13,915 | 10,051 | 7,053 | |||||||||
| Net income | $ | 60,899 | $ | 38,977 | $ | 27,689 | ||||||
| KORBIN COMPANY | ||||||||||||
| Comparative Balance Sheets | ||||||||||||
| December 31, 2016, 2015, and 2014 | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| Assets | ||||||||||||
| Current assets | $ | 48,835 | $ | 38,207 | $ | 51,074 | ||||||
| Long-term investments | 0 | 400 | 4,870 | |||||||||
| Plant assets, net | 92,103 | 98,249 | 57,441 | |||||||||
| Total assets | $ | 140,938 | $ | 136,856 | $ | 113,385 | ||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities | $ | 20,577 | $ | 20,392 | $ | 19,842 | ||||||
| Common stock | 64,000 | 64,000 | 46,000 | |||||||||
| Other paid-in capital | 8,000 | 8,000 | 5,111 | |||||||||
| Retained earnings | 48,361 | 44,464 | 42,432 | |||||||||
| Total liabilities and equity | $ | 140,938 | $ | 136,856 | $ | 113,385 |
Question 2
Question 3
Answer to question 1
Solution:
| Current Ratio | ||||||
| Choose Numerator: | / | Choose Denominator: | = | Current ratio | ||
| current assets | / | current liability | = | Current ratio | ||
| 2016 | 48835 | / | 20577 | = | 2.37 | to 1 |
| 2015 | 38207 | / | 20392 | = | 1.87 | to 1 |
| 2014 | 51074 | / | 19842 | = | 2.57 | to 1 |
| common size income statment | 2,016 | 2,015 | 2,014 | 2,016 | 2,015 | 2,014 |
| Sales | 450,688 | 345,264 | 239,600 | 100.00% | 100.00% | 100.00% |
| Cost of goods sold | 271,314 | 218,207 | 153,344 | 60.20%* | 63.20% | 64.00% |
| Gross profit | 179,374 | 127,057 | 86,256 | 39.80% | 36.80% | 36.00% |
| Selling expenses | 63,998 | 47,646 | 31,627 | 14.20% | 13.80% | 13.20% |
| Administrative expenses | 40,562 | 30,383 | 19,887 | 9.00% | 8.80% | 8.30% |
| Total expenses | 104,560 | 78,029 | 51,514 | 23.20% | 22.60% | 21.50% |
| Income before taxes | 74,814 | 49,028 | 34,742 | 16.60% | 14.20% | 14.50% |
| Income taxes | 13,915 | 10,051 | 7,053 | 3.09% | 2.91% | 2.94% |
| Net income | 60,899 | 38,977 | 27,689 | 13.51% | 11.29% | 11.56% |
*271314/450688 =60.20%
| Balance sheet trend | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 |
| Assets | a | b | c | a/c | b/c | c/c |
| Current assets | 48,835 | 38,207 | 51,074 | 95.62%** | 74.81% | 100.00% |
| Long-term investments | 0 | 400 | 4,870 | 0.00% | 8.21% | 100.00% |
| Plant assets, net | 92,103 | 98,249 | 57,441 | 160.34% | 171.04% | 100.00% |
| Total assets | 140,938 | 136,856 | 113,385 | 124.30% | 120.70% | 100.00% |
| Liabilities and Equity | ||||||
| Current liabilities | 20,577 | 20,392 | 19,842 | 103.70% | 102.77% | 100.00% |
| Common stock | 64,000 | 64,000 | 46,000 | 139.13% | 139.13% | 100.00% |
| Other paid-in capital | 8,000 | 8,000 | 5,111 | 156.53% | 156.53% | 100.00% |
| Retained earnings | 48,361 | 44,464 | 42,432 | 113.97% | 104.79% | 100.00% |
| Total liabilities and equity | 140,938 | 136,856 | 113,385 | 124.30% | 120.70% | 100.00% |
**48835/51074
Answer to question 2
Answer to question 3
