Solvency and Profitability Trend Analysis
(Graph Picture from A-D is on the buttom for references)
Addai Company has provided the following comparative information:
20Y8 |
20Y7 |
20Y6 |
20Y5 |
20Y4 |
||||||
Net income |
$273,406 |
|
$367,976 |
|
$631,176 |
|
$884,000 |
|
$800,000 |
|
Interest expense |
616,047 |
|
572,003 |
|
528,165 |
|
495,000 |
|
440,000 |
|
Income tax expense |
31,749 |
|
53,560 |
|
106,720 |
|
160,000 |
|
200,000 |
|
Total assets (ending balance) |
4,417,178 |
|
4,124,350 |
|
3,732,443 |
|
3,338,500 |
|
2,750,000 |
|
Total |
3,706,557 |
|
3,433,152 |
|
3,065,176 |
|
2,434,000 |
|
1,550,000 |
|
Average total assets |
4,270,764 |
|
3,928,396 |
|
3,535,472 |
|
3,044,250 |
|
2,475,000 |
|
Average total stockholders' equity |
3,569,855 |
|
3,249,164 |
|
2,749,588 |
|
1,992,000 |
|
1,150,000 |
|
You have been asked to evaluate the historical performance of the company over the last five years.
Selected industry ratios have remained relatively steady at the following levels for the last five years:
20Y4–20Y8 |
||
Return on total assets |
28% |
|
Return on stockholders’ equity |
18% |
|
Times interest earned |
2.7 |
|
Ratio of liabilities to stockholders’ equity |
0.4 |
|
Required:
Determine the following for the years 20Y4 through 20Y8 for each of the graphs below. Use the amounts given above in your calculations. Round to one decimal place:
a. Return on total assets:
20Y8 | fill in the blank % |
20Y7 | fill in the blank % |
20Y6 | fill in the blank % |
20Y5 | fill in the blank % |
20Y4 | fill in the blank % |
b. Return on stockholders' equity:
20Y8 | fill in the blank 6 % |
20Y7 | fill in the blank 7 % |
20Y6 | fill in the blank 8 % |
20Y5 | fill in the blank 9 % |
20Y4 | fill in the blank 10 % |
c. Times interest earned:
20Y8 | fill in the blank |
20Y7 | fill in the blank |
20Y6 | fill in the blank |
20Y5 | fill in the blank |
20Y4 | fill in the blank |
d. Ratio of liabilities to stockholders' equity:
20Y8 | fill in the blank |
20Y7 | fill in the blank |
20Y6 | fill in the blank |
20Y5 | fill in the blank |
20Y4 | fill in the blank |
Trending nowThis is a popular solution!
Step by stepSolved in 5 steps with 4 images
- Horizontal analysis (trend analysis) percentages for Pharoah Company's sales, cost of goods sold, and expenses are listed here. Horizontal Analysis 2023 Sales revenue Cost of goods sold Expenses 97.5 % Net income 104.0 107.0 2022 104.8 % 97.0 97.3 2021 100.0 % 100.0 100.0 Did Pharoah's net income increase, decrease, or remain unchanged over the 3-year period?arrow_forwardThis topic is about CVP Analysis. Check the photo for the problemarrow_forwardForecast Income Statement and Balance Sheet Following are the income statement and balance sheet for Medtronic PLC. Note: Complete the entire question using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places. Medtronic PLC Consolidated Statement of Income $ millions, For Fiscal Year Ended April 26, 2019 Net sales $30,557 Costs and expenses Cost of products sold 9,155 Research and development expense 979 Selling, general, and administrative expense 10,418 Amortization of intangible assets 1,764 Restructuring charges, net 83 Certain litigation charges, net 166 Other operating expense, net 258 Operating profit 7,734 Other nonoperating income, net (157) Interest expense 1,444 Income before income taxes 6,447 Income tax provision 547 Net income 5,900 Net income loss attributable to noncontrolling interests (19) Net income attributable to Medtronic $5,881…arrow_forward
- Cochran corporation, Inc. has the following income statement: Cochran corporation, Inc. Income statement For the year ended December 31, 2021 net sales $240 Cost of goods sold $150 gross profit $90 Operating expenses $65 Net income $25 Using vertical analysis, what percentage is assigned to operating expenses? a. 27,1% b. 43.3% c. 72.2% d. 260.0%arrow_forwardplease provide answer with calculatinoarrow_forwardanswer the questionsarrow_forward
- Please answer very fast then i ll upvote Calculate EBIT. Revenue 1,061,751.0 Cost of sales 690,135.0 Selling, general and administration 53,087.0 Other income 11,796.0 Operating income 330,325.0 Interest expense 19,874.0 Profit before tax 310,451.0 Tax expense 46,500.0 Net income 263,951.0 The footnotes mention the following: Cost of sales includes inventory write off costs 39,677.0 Cost of sales includes distribution costs 120,458.0 SG&A includes corporate restructuring expenses 15,570.0 Responses 385,572.0 275,078.0 330,325.0 506,030.0arrow_forwardComparative Income Statements Consider the following income statement data from the Mono Company: Sales revenue Cost of goods sold Selling expenses Administrative expenses Income tax expense 2019 2018 $600,000 $450,000 336,000 279,000 105,000 99,000 60,000 50,000 4,000 3,000 Prepare a contparative income statement, showing increases, and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). Sales Revenue Cost of Goods Sold MONO COMPANY Comparative Income Statements ♦ Selling Expenses Administrative Expenses Total Income before Income Taxes ◆ → $ $ 2019 0 $ 0 0 0 0 oooo 0 0 $ 2018 Increase (Decrease) 0 $ 0 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 0 Percent Change 0% 0% 0% 0% 0% 0% 0% 0% 0 %arrow_forwardTrend Analysis Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $940,300 $810,600 $681,200 $582,200 $493,400 Interest expense 319,700 291,800 252,000 192,100 153,000 Income tax expense 300,896 226,968 190,736 151,372 118,416 Average total assets 5,779,817 5,103,704 4,360,748 3,704,785 3,153,171 Average stockholders' equity 1,975,420 1,769,869 1,548,182 1,373,113 1,203,415 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: Industry Ratios Return on total assets 21.5 % Return on stockholders’ equity 44.4 % Times interest earned 4.6 Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place. a. Return on total assets: Year 5…arrow_forward
- using the following table (image attached) calculate the financial leverage multiplier used in the BMC systemarrow_forwardSolvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Υ8 20Y7 20Υ6 20Y5 20Υ4 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: 20Υ4-2ΟY8 Return on total assets 28% Return on stockholders' equity 18% Times interest earned 2.7 Ratio of liabilities to stockholders' equity 0.4 Required: 1.…arrow_forwardForecast Income Statement and Balance Sheet Following are the income statement and balance sheet for Medtronic PLC. Note: Complete the entire question using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places. Medtronic PLC Consolidated Statement of Income $ millions, For Fiscal Year Ended April 26, 2019 Net sales $30,557 Costs and expenses Cost of products sold 9,155 Research and development expense 979 Selling, general, and administrative expense 10,418 Amortization of intangible assets 1,764 Restructuring charges, net 83 Certain litigation charges, net 166 Other operating expense, net 258 Operating profit 7,734 Other nonoperating income, net (157) Interest expense 1,444 Income before income taxes 6,447 Income tax provision 547 Net income 5,900 Net income loss attributable to noncontrolling interests (19) Net income attributable to Medtronic $5,881…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education