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Problem 17-1A Ratios, common-size statements, and trend percents Selected comparative financial statements of Bennington Company follow: BENNINGTON COMPANY Comparative Income Statements For Years Ended December 31, 2006, 2005, and 2004 2006 2005 2004 Sales . . . . . . . . . . . . . . . . . . . . . . $444,000 $340,000 $236,000 Cost of goods sold . . . . . . . . . . . 267,288 212,500 151,040 Gross profit . . . . . . . . . . . . . . . . 176,712 127,500 84,960 Selling expenses . . . . . . . . . . . . . 62,694 46,920 31,152 Administrative expenses . . . . . . . 40,137 29,920 19,470 Total expenses . . . . . . . . . . . . . . 102,831 76,840 50,622 Income before taxes . . . . . . . . . . 73,881 50,660 34,338 Income taxes . . . . . . . . . . . . . . . 13,764 10,370 6,962 Net income . . . . . . . . . . . . . . . . $ 60,117 $ 40,290 $ 27,376 BENNINGTON COMPANY Comparative Balance Sheets December 31, 2006, 2005, and 2004 2006 2005 2004 Assets Current assets . . . . . . . . . . . . . . . $ 48,480 $ 37,924 $ 50,648 Long-term investments . . . . . . . . . 0 500 3,720 Plant assets, net . . . . . . . . . . . . . . . 90,000 96,000 57,000 Total assets . . . . . . . . . . . . . . . . . . $138,480 $134,424 $111,368 Liabilities and Equity Current liabilities . . . . . . . . . . . . . . $ 20,200 19,960 19,480 Common stock . . . . . . . . . . . . . . . 72,000 72,000 54,000 Other contributed capital . . . . . . . 9,000 9,000 6,000 Retained earnings . . . . . . . . . . . . . 37,280 33,464 31,888 Total liabilities and equity . . . . . . . . $138,480 $134,424 $111,368 1. Compute each year’s current ratio. 2. Express the income statement data in common-size percents. 3. Express the balance sheet data in trend percents with 2004 as the base year. Analysis Component 4. Comment on any significant relations revealed by the ratios and percents computed.

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