Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $975,900 $841,300 $707,000 $604,300 $512,100 Interest expense 331,800 302,900 261,600
Addai Company has provided the following comparative information:
20Y8 | 20Y7 | 20Y6 | 20Y5 | 20Y4 | ||||||
Net income | $975,900 | $841,300 | $707,000 | $604,300 | $512,100 | |||||
Interest expense | 331,800 | 302,900 | 261,600 | 199,400 | 158,800 | |||||
Income tax expense | 312,288 | 235,564 | 197,960 | 157,118 | 122,904 | |||||
Total assets (ending balance) | 6,292,263 | 6,655,261 | 4,786,739 | 4,997,099 | 3,789,467 | |||||
Total stockholders' equity (ending balance) | 1,989,109 | 2,416,761 | 1,542,297 | 1,931,905 | 1,159,143 | |||||
Average total assets | 6,473,762 | 5,721,000 | 4,891,919 | 4,164,249 | 3,549,735 | |||||
Average stockholders' equity | 2,202,935 | 1,979,529 | 1,737,101 | 1,545,524 | 1,358,355 |
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 | 41.1% | |
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 | % |
20Y7 | % |
20Y6 | % |
20Y5 | % |
20Y4 | % |
b. Return on stockholders equity:
20Y8 | % |
20Y7 | % |
20Y6 | % |
20Y5 | % |
20Y4 | % |
c. Times interest earned:
20Y8 | |
20Y7 | |
20Y6 | |
20Y5 | |
20Y4 |
d. Ratio of liabilities to stockholders' equity:
20Y8 | |
20Y7 | |
20Y6 | |
20Y5 | |
20Y4 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started