- Trend Analysis Critelli Company Has Provided The Following Comparative Information Year 5 Year 4 Year 3 Year 2 Year 1 N 1 (97.64 KiB) Viewed 59 times
Trend Analysis Critelli
Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,014,300 $874,400 $734,800 $628,000 $532,200 Interest expense 344,900 314,800 271,900 207,200 165,000 Income tax expense 324,576 244,832 205,744 163,280 127,728 Average total assets 5,616,529 4,955,000 4,229,832 3,584,549 3,044,541 Average stockholders' equity 1,932,000 1,724,655 1,502,658 1,327,696 1,159,477 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 23.9 % Return on stockholders' equity 49.3 % 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 24.2 % Year 4 24 % Year 3 23.8 % Year 2 23.3 % Year 1 22.9 % b. Return on stockholders' equity: Year 5 52.5 % Year 4 50.7 % Year 3 48.9 % Year 2 47.3 % Year 1 45.9 %
c. Times interest earned: Year 5 5 3.94 X Year 4 4 Year 3 3 llll Year 2 Year 1