Selected comparative financial statements of Bennington Company follow.

BENNINGTON COMPANY
Comparative Income Statements

For Years Ended December 31,2012,2011,and 2010

2012 2011
Sales                          $444,000 $340,000
Cost of goods sold              267,288 212,500
Gross profit                    176,712 127,500
Selling expenses                62,694 46,920
Administrative expenses          40,137 29,920
Total expenses                 102,831 76,840
Income before taxes             73,881 50,660
Income taxes                   13,764 10,370
Net income                     $ 60,117 $ 40,290

BENNINGTON COMPANY
Comparative Balance Sheets
December 31,2012,2011 and 2010
2012 2011
Assets
Current assets                   $ 48,480 $ 37,924
Long-term investments            0 500
Plant assets, net                  90,000 96,000
Total assets                     $138,480 $134,424
Liabilities and Equity
Current liabilities                $ 20,200 $ 19,960
Common stock                  72,000 72,000
Other paid-in capital              9,000 9,000
Retained earnings                37,280 33,464
Total liabilities and equity          $138,480 $134,424
Required
1. Compute each year’s current ratio. (Round ratio amounts to one decimal.)
2. Express the income statement data in common-size percents. (Round percents to two decimals.)
3. Express the balance sheet data in trend percents with 2010 as the base year. (Round percents to two decimals.)
4. Comment on any significant relations revealed by the ratios and percents computed.
Answer 4
Current Ratio has decreased from 2.60 in year 2010 to 1.90 in 2011 and has
increased to 2.40 in year 2012. This is a good sign for the company.

The company is able to meet its short term obligations from the liquid assets.
Net Income has shown favorable trend in the years as it has increased from 11.60 %
in year 2010 to 13.54 % in year 2012.
Total Assets increased by 20.70 % in year 2011 from year 2010 and has risen by 3.02
% in year 2012 compared to year 2011.
Current Assets decreased by 25.12 % in year 2011 from year 2010 and has risen by
27.83 % in year 2012. This is a positive sign for the company.
Current Liabilities has increased by 1.20 % in year 2012 which is less than the
increase of 2.46 % in year 2011. This is a good sign for the company.
 2010
$236,000
151,040
84,960
31,152
19,470
50,622
34,338
6,962
$ 27,376

2010

$ 50,648
3,720 Answer 1
57,000 Current Ratio = Current Assets/Current Liabilities
$111,368 Year 2012 2011 2010
Current Assets $ 48,480 $ 37,924 $ 50,648
$ 19,480 Current Liabilities $ 20,200 $ 19,960 $ 19,480
54,000 Current Ratio 2.40 1.90 2.60
6,000
31,888
$111,368
Answer 2
Year 2012 % 2011
Sales                          $ 444,000 100% $ 340,000
cents to two decimals.) Cost of goods sold              $ 267,288 60.20% $ 212,500
Gross profit                    $ 176,712 39.80% $ 127,500
Selling expenses                $ 62,694 14.12% $ 46,920
Administrative expenses          $ 40,137 9.04% $ 29,920
Total expenses                 $ 102,831 23.16% $ 76,840
Income before taxes             $ 73,881 16.64% $ 50,660
Income taxes                   $ 13,764 3.10% $ 10,370
Net income                     $ 60,117 13.54% $ 40,290

Answer 3
 2012 2011 Change
Assets
Current assets                   $ 48,480 $ 37,924 $ 10,556
Long-term investments            $ - $ 500 $ -500
Plant assets, net                  $ 90,000 $ 96,000 $ -6,000
Total assets                     $ 138,480 $ 134,424 $ 4,056
Liabilities and Equity
Current liabilities                $ 20,200 $ 19,960 $ 240
Common stock                  $ 72,000 $ 72,000 $ -
Other paid-in capital              $ 9,000 $ 9,000 $ -
Retained earnings                $ 37,280 $ 33,464 $ 3,816
Total liabilities and equity          $ 138,480 $ 134,424 $ 4,056
 % 2010 %
100% $ 236,000 100%
62.50% $ 151,040 64.00%
37.50% $ 84,960 36.00%
13.80% $ 31,152 13.20%
8.80% $ 19,470 8.25%
22.60% $ 50,622 21.45%
14.90% $ 34,338 14.55%
3.05% $ 6,962 2.95%
11.85% $ 27,376 11.60%
 % 2011 2010 Change %

27.83% $ 37,924 $ 50,648 $-12,724 -25.12%

-100.00% $ 500 $ 3,720 $ -3,220 -86.56%
-6.25% $ 96,000 $ 57,000 $ 39,000 68.42%
3.02% $ 134,424 $ 111,368 $ 23,056 20.70%

1.20% $ 19,960 $ 19,480 $ 480 2.46%

0.00% $ 72,000 $ 54,000 $ 18,000 33.33%
0.00% $ 9,000 $ 6,000 $ 3,000 50.00%
11.40% $ 33,464 $ 31,888 $ 1,576 4.94%
3.02% $ 134,424 $ 111,368 $ 23,056 20.70%