Question

KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2019, 2018, and 2017
	2019			2018			2017
Sales	$	446,549		$	342,093		$	237,400
Cost of goods sold		268,822			213,808			151,936
Gross profit		177,727			128,285			85,464
Selling expenses		63,410			47,209			31,337
Administrative expenses		40,189			30,104			19,704
Total expenses		103,599			77,313			51,041
Income before taxes		74,128			50,972			34,423
Income tax expense		13,788			10,449			6,988
Net income	$	60,340		$	40,523		$	27,435

KORBIN COMPANY
Comparative Balance Sheets
December 31, 2019, 2018, and 2017
	2019			2018			2017
Assets
Current assets	$	59,723		$	39,972		$	53,434
Long-term investments		0			600			4,610
Plant assets, net		110,913			101,174			59,393
Total assets	$	170,636		$	141,746		$	117,437
Liabilities and Equity
Current liabilities	$	24,913		$	21,120		$	20,551
Common stock		70,000			70,000			52,000
Other paid-in capital		8,750			8,750			5,778
Retained earnings		66,973			41,876			39,108
Total liabilities and equity	$	170,636		$	141,746		$	117,437

	Current Ratio Choose Numerator: / Choose Denominator: = Current ratio / = Current ratio 2019 / = 0 to 1 2018 / = 0 to 1 2017 / = 0 to 1

	KORBIN COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales % % % Cost of goods sold -1 -1 -1 Gross profit Selling expenses -1 -1 -1 Administrative expenses -1 -1 -1 Total expenses Income before taxes -1 -1 -1 Income tax expense -1 -1 -1 Net income % % %

	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 %

Answer 1

1
Current ratio
	Choose Numerator:	/	Choose Denominator:	=	Current ratio
	Current Assets	/	Current Liabilities	=	Current ratio
2019	59723	/	24913	=	2.40	to 1
2018	39972	/	21120	=	1.89	to 1
2017	53434	/	20551	=	2.60	to 1

2
KORBIN COMPANY
Common-Size Comparative Income Statements
For Years Ended December 31, 2019, 2018, and 2017
	2019	2018	2017
Sales	100.00%	100.00%	100.00%
Cost of goods sold	60.20%	62.50%	64.00%
Gross profit	39.80%	37.50%	36.00%
Selling expenses	14.20%	13.80%	13.20%
Administrative expenses	9.00%	8.80%	8.30%
Total expenses	23.20%	22.60%	21.50%
Income before taxes	16.60%	14.90%	14.50%
Income taxes	3.09%	3.05%	2.94%
Net income	13.51%	11.85%	11.56%
3
KORBIN COMPANY
Balance Sheet Data in Trend Percents
December 31, 2019, 2018, 2017
	2019	2018	2017
Assets
Current assets	111.77%	74.81%	100.00%
Long-term investments	0.00%	13.02%	100.00%
Plant assets, net	186.74%	170.35%	100.00%
Total assets	145.30%	120.70%	100.00%
Liabilities and Equity
Current liabilities	121.23%	102.77%	100.00%
Common stock	134.62%	134.62%	100.00%
Other paid-in capital	151.44%	151.44%	100.00%
Retained earnings	171.25%	107.08%	100.00%
Total liabilities and equity	145.30%	120.70%	100.00%