Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $988,700 $852,300 $716,200 $612,100 $518,700 Interest expense 336,200 306,800 265,000

Addai Company has provided the following comparative information:

20Y8 20Y7 20Y6 20Y5 20Y4
Net income $988,700 $852,300 $716,200 $612,100 $518,700
Interest expense 336,200 306,800 265,000 202,000 160,800
Income tax expense 316,384 238,644 200,536 159,146 124,488
Total assets (ending balance) 6,376,172 6,741,650 4,849,350 5,061,762 3,838,503
Total stockholders' equity (ending balance) 2,011,130 2,442,474 1,558,934 1,951,850 1,171,110
Average total assets 6,558,911 5,795,500 4,955,556 4,218,135 3,595,238
Average stockholders' equity 2,226,802 2,000,704 1,755,392 1,561,480 1,372,222

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:

20Y420Y8
Return on total assets 19.9%
Return on stockholders equity 41.2%
Times interest earned 4.6
Ratio of liabilities to stockholders' equity 2.1

Required:

1. Determine the following for the years 20Y4 through 20Y8. Round to one decimal place:

a. Return on total assets:

20Y8 fill in the blank 1%
20Y7 fill in the blank 2%
20Y6 fill in the blank 3%
20Y5 fill in the blank 4%
20Y4 fill in the blank 5%

b. Return on stockholders equity:

20Y8 fill in the blank 6%
20Y7 fill in the blank 7%
20Y6 fill in the blank 8%
20Y5 fill in the blank 9%
20Y4 fill in the blank 10%

c. Times interest earned:

20Y8 fill in the blank 11
20Y7 fill in the blank 12
20Y6 fill in the blank 13
20Y5 fill in the blank 14
20Y4 fill in the blank 15

d. Ratio of liabilities to stockholders' equity:

20Y8 fill in the blank 16
20Y7 fill in the blank 17
20Y6 fill in the blank 18
20Y5 fill in the blank 19
20Y4 fill in the blank 20

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Financial Accounting A Guide For Non-specialists

Authors: Jimmy Winfield, Mark Graham, Taryn Miller

1st Edition

0198847270, 9780198847274

More Books

Students explore these related Accounting questions