Lancelot Company has provided the following information:

You have been asked to evaluate the historical performance of the company over the past five years. Lancelot has no preferred shareholders.
Selected industry ratios have remained relatively steady at the following levels for the past five years:
___________________ 2011-2015
Return on assets .................................................15%
Return on common shareholders' equity .....................23%
Times interest earned ratio .....................................3.5 times
Debt ratio .........................................................40%
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. Return on assets
b. Return on common shareholders' equity
c. Times interest earned ratio d. Debt ratio
Display both the company ratio and the industry benchmark on each graph so that each graph shows two lines.
2. Prepare an analysis of the graphs in (1).

Transcribed Image Text:

2014 2013 2012 2011 2015 Net income Interest expense Income taxes expense Total assets (ending balance) Total shareholders' equity (ending balance) Average total assets Average shareholders' $ 1.930,500 $1.287,000 345.000 318,240 8.845.200 $ 500,000 200,000 120,000 4,200,000 $ 975,000 300,000 244,800 6,804,000 $ 650,000 240.000 163,200 5.040.000 400,200 477,360 11.498,760 3,525,000 5.922.000 1,900,000 3,600,000 6,742,500 10,171,980 4,812,000 7.824,600 2,550,000 4,620.000 1,650,000 5,777,250 4,168,500 2,225,000 3,037,500 equity