Analysis using ratios

1. Crosby Company has provided the following comparative information 2016 2015 2014 2012 Net income Interest expense Income Tax expense Total assets (ending balance) Stockholders' equity (ending balance) 18,706,200 13,134,480 9,420,000 6,648,000 4,800,000 Average Total asset:s Average Stockholders' equity 5,571,7203,714,4802,772,000 1,848,000 1,400,000 500,000 320,000 29,378,491 22,598,83917,120,333 12,588,480 10,152,000 1,052,060 1,225,572 891,576 845,222 768,600 640,320 610,000 441,600 25,988,665 19,859,586 14,854,406 11,370,240 8,676,000 15,920,340 11,277,2408,034,000 5,724,000 4,100,000 You have been asked to evaluate the performance of the company over the last five years. Selected industry ratios, an average of all companies in the same business including Crosby are as follows Return on total assets Return on Stockholders' Equity Number of times interest charges covered Debt to Equity ratio 2012-16 19% 26% 3.4 times 1.4 times a. Prepare a table with columns for each year showing the following ratios (1) Return on total assets (2) Return on stockholders' equity (3) Number of times interest charges covered (4) Debt to Equity ratio b. Comment on trends in these ratios and refer to the advisability or otherwise of the company's use of borrowing