Question

Selected comparative financial statements of Tripoly Company follow.

TRIPOLY COMPANY

Comparative Income Statements

For Years Ended December 31, 2017–2011

\( thousands 2017 2016 2015 2014 2013 2012 2011

Sales . . . . . . . . . . . . . . . . . . . . . . . \)560 \(610 \)630 \(680 \)740 \(770 \)860

Cost of goods sold . . . . . . . . . . . . 276 290 294 314 340 350 380

Gross profit . . . . . . . . . . . . . . . . . . 284 320 336 366 400 420 480

Operating expenses . . . . . . . . . . . 84 104 112 126 140 144 150

Net income . . . . . . . . . . . . . . . . . . \(200 \)216 \(224 \)240 \(260 \)276 \(330

TRIPOLY COMPANY

Comparative Balance Sheets

December 31, 2017–2011

\) thousands 2017 2016 2015 2014 2013 2012 2011

Assets

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . \( 44 \) 46 \( 52 \) 54 \( 60 \) 62 \( 68

Accounts receivable, net . . . . . . . . . . . . 130 136 140 144 150 154 160

Merchandise inventory . . . . . . . . . . . . . . 166 172 178 180 186 190 208

Other current assets . . . . . . . . . . . . . . . . 34 34 36 38 38 40 40

Long-term investments . . . . . . . . . . . . . 36 30 26 110 110 110 110

Plant assets, net . . . . . . . . . . . . . . . . . . . 510 514 520 412 420 428 454

Total assets . . . . . . . . . . . . . . . . . . . . . . . \)920 \(932 \)952 \(938 \)964 \(984 \)1,040

Liabilities and Equity Current liabilities . . . . . . . . . . . . . . . . . . . \(148 \)156 \(186 \)190 \(210 \)260 \( 280

Long-term liabilities . . . . . . . . . . . . . . . . 92 120 142 148 194 214 260

Common stock . . . . . . . . . . . . . . . . . . . . 160 160 160 160 160 160 160

Other paid-in capital . . . . . . . . . . . . . . . . 70 70 70 70 70 70 70

Retained earnings . . . . . . . . . . . . . . . . . 450 426 394 370 330 280 270

Total liabilities and equity . . . . . . . . . . . . \)920 \(932 \)952 \(938 \)964 \(984 \)1,040

Required

1. Compute trend percents for all components of both statements using 2011 as the base year. (Round percents to one decimal.)

Short answer

The trend in net income percentage of 2017 is 60.6% and for total assets of balance sheet trend percentage in 2017 is 88.5%.

Step-by-step solution

Meaning of Income Statement

An income statement is a part of a financial statement that reveals the net benefit earned or loss incurred by the company by comparing its revenues with expenditures.

Preparation of Income Statement trends

Tripoly Company
Income Statement Trends
For the year ended December 31, 2017-2011
	2017 (%)	2016 (%)	2015 (%)	2014 (%)	2013 (%)	2012 (%)	2011 (%)
Sales	65.1	70.9	73.3	79.1	86.0	89.5	100
COGS	72.6	76.3	77.4	82.6	89.5	92.1	100
Gross Profit	59.2	66.7	70.0	76.3	83.3	87.5	100
Operating expenses	56.0	69.3	74.7	84.0	93.3	96.0	100
Net income	60.6	65.5	67.9	72.7	78.8	83.6	100

Step 3:Preparation of Balance Sheet Trends

Tripoly Company
Balance sheet Trends
For the year ended December 31, 2017-2011
	2017 (%)	2016 (%)	2015 (%)	2014 (%)	2013 (%)	2012 (%)	2011 (%)
Assets
Cash	64.7	67.6	76.5	79.4	88.2	91.2	100
Accounts Receivables	81.3	85.0	87.5	90.0	93.8	96.3	100
Merchandise Inventory	85.0	82.7	85.6	86.5	89.4	91.3	100
Other Current Assets	32.7	85.0	90.0	95.0	95.0	100.0	100
Long term Investments	32.7	27.3	23.6	100.0	100.0	100.0	100
Plant Assets	112.3	113.2	114.5	90.7	92.5	94.3	100
Total Assets	88.5	89.6	91.5	90.2	92.7	94.6	100
Liabilities and Equity
Current liabilities	52.9	55.7	66.4	67.9	75.0	92.9	100
Long-term Liabilities	35.4	46.2	54.6	56.9	74.6	82.3	100
Common Stock	100.0	100.0	100.0	100	100	100	100
Other paid-in capital	100.0	100.0	100.0	100	100	100	100
Retained Earnings	166.7	157.8	145.9	137.0	122.2	103.7	100
Total Liabilities and Equity	88.5	89.6	91.5	90.2	92.7	94.6	100