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 18.9 %   Return on stockholders’ equity 39.2 %   Times interest earned 4.6     Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Critelli Company has provided the following comparative information:

      Year 5     Year 4     Year 3     Year 2     Year 1
Net income $1,327,400 $1,144,300 $961,600 $821,900 $696,500          
Interest expense 451,300 411,900 355,800 271,200 215,900          
Income tax expense 424,768 320,404 269,248 213,694 167,160          
Average total assets 9,264,063 8,190,526 7,007,447 5,973,224 5,097,207          
Average stockholders' equity 3,130,660 2,818,473 2,478,351 2,209,409 1,945,531          

 

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 18.9 %  
Return on stockholders’ equity 39.2 %  
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
%
Year 4
%
Year 3
%
Year 2
%
Year 1
%
b. Return on stockholders' equity:
Year 5
%
Year 4
%
Year 3
%
Year 2
%
Year 1
%
c. Times interest earned:
Year 5
Year 4
Year 3
Year 2
Year 1
Transcribed Image Text:a. Return on total assets: Year 5 % Year 4 % Year 3 % Year 2 % Year 1 % b. Return on stockholders' equity: Year 5 % Year 4 % Year 3 % Year 2 % Year 1 % c. Times interest earned: Year 5 Year 4 Year 3 Year 2 Year 1
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