Crosby Company has provided the following comparative information:

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:
2010–2014
Rate earned on total assets ........19%
Rate earned on stockholders’ equity ....26%
Number of times interest charges are earned.. 3.4
Ratio of liabilities to stockholders’ equity.. 1.4
Instructions
1. Prepare four line graphs with the ratio on the vertical axis and the years on the horizontal axis for the following four ratios (rounded to one decimal place):
a. Rate earned on total assets
b. Rate earned on stockholders’ equity
c. Number of times interest charges are earned
d. Ratio of liabilities to stockholders’ equity
Display both the company ratio and the industry benchmark on each graph. That is, each graph should have two lines.
2. Prepare an analysis of the graphs in(1).

Transcribed Image Text:

2014 2013 2012 2011 2010 Net income 5,571,720 3,714,480 2,772,000 1848,000 $ 1,400,000 891,576 845,222 500,000 320,000 1,052,060 768,600 640,320 610,000 441,600 Interest expense Income tax expense 1,225,572 29,378,491 22,98,839 7,120,333 12,588,480 10,152,000 Total assets (ending balance) Total stockholders' equity (ending balance) Average total assets 18,706200 13,134,480 9420,00 25,988,665 19,859,586 14,854,406 11,370,240 8,676,000 9, 420,000 6,648,000 4,800,000 Average total stockholders' equity 5,920,340 11,277,240 8,034,000 5,724,000 4,100,000