=+(ending balance) 6,742,500 4,812,000 3,525,000 2,550,000 1,900,000 Average total assets 10,171,980 7,824,600 5,922,000 4,620,000 3,600,000 Average stockholders’ equity 5,777,250 4,168,500 3,037,500 2,225,000 1,650,000 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:

2006–2010 Rate earned on total assets 15%

Rate earned on stockholders’ equity 18%

Number of times interest charges earned 3.5 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