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# Ratios, common-size statements, and trend percents Selected comparative financial statements of Korbin Company follow:

Problem 13-1A: Ratios, common-size statements, and trend percents
Selected comparative financial statements of Korbin Company follow:
KORBIN Company
Comparative Income Statements
For Years Ended December 31, 2009, 2008, and 2007
2009 2008 2007
Sales \$430,185 \$329,557 \$228,700
Cost of goods sold 258,971 207,291 146,368
Gross Profit \$171,214 \$122,266 \$82,332
Selling expenses 61,086 45,479 30,188
Total expenses \$99,803 \$74,480 \$49,170
Income before taxes \$71,411 \$47,786 \$33,162
Income taxes 13,282 9,796 6,732
Net income \$58,129 \$37,990 \$26,430
KORBIN Company
Comparative Balance Sheets
December 31, 2009, 2008, and 2007
2009 2008 2007
Assets
Current assets \$45,403 \$36,972 \$47,969
Long-term investments 0 700 4,850
Plant assets, net 86,967 90,864 53,673
Total assets \$132,370 \$128,536 \$106,492
Liabilities and Equity
Current liabilities \$19,326 \$19,152 \$18,636
Common stock 67,000 67,000 49,000
Other paid-in capital 8,375 8,375 5,444
Retained earnings 37,669 34,009 33,412
Total liabilities and equity \$132,370 \$128,536 \$106,492
Required:
1. Compute each year's current ratio. (Round your answer to 1 decimal place.)
2. Express the income statement data in common-size percents.
3. Express the balance sheet data in trend percents with 2007 as the base year.

Problem 13-1A: Ratios, common-size statements, and trend percents L.O. P1, P2, P3
Selected comparative financial statements of Korbin Company follow:
KORBIN Company
Comparative Income Statements
For Years Ended December 31, 2009, 2008, and 2007
2009 2008 2007
Sales \$ 430,185 \$ 329,557 \$ 228,700
Cost of goods sold 258,971 207,291 146,368
Gross Profit 171,214 122,266 82,332
Selling expenses 61,086 45,479 30,188
Total expenses 99,803 74,480 49,170
Income before taxes 71,411 47,786 33,162
Income taxes 13,282 9,796 6,732
Net income \$ 58,129 \$ 37,990 \$ 26,430
KORBIN Company
Comparative Balance Sheets
December 31, 2009, 2008, and 2007
2009 2008 2007
Assets
Current assets \$ 45,403 \$ 36,972 \$ 47,969
Long-term investments 0 700 4,850
Plant assets, net 86,967 90,864 53,673
Total assets \$ 132,370 \$ 128,536 \$ 106,492
Liabilities and Equity
Current liabilities \$ 19,326 \$ 19,152 \$ 18,636
Common stock 67,000 67,000 49,000
Other paid-in capital 8,375 8,375 5,444
Retained earnings 37,669 34,009 33,412
Total liabilities and equity \$ 132,370 \$ 128,536 \$ 106,492
Required:
1. Compute each year's current ratio. (Round your answer to 1 decimal place.)
Current ratio December 31, 2009: to
Current ratio December 31, 2008: to
Current ratio December 31, 2007: to
2. Express the income statement data in common-size percents. (Round your answer to 2 decimal places.
Omit the "%" sign, which is provided for you.)
KORBIN Company
Common-Size Comparative Income Statements
For Years Ended December 31, 2009, 2008, 2007
2009 2008 2007
Sales % % %
Cost of goods sold
Gross profit
Selling expenses
Total expenses
Income before taxes
Income taxes
Net income % %
3. Express the balance sheet data in trend percents with 2007 as the base year. (Round your answer to 2
decimal places. Omit the "%" sign, which is provided for you.)
KORBIN Company
Balance Sheet Data in Trend Percents
December 31, 2009, 2008, 2007
2009 2008 2007
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

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