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Aritelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,035,300 $892,500 $750,000 $641,000 $543,200

Aritelli Company has provided the following comparative information:

Year 5 Year 4 Year 3 Year 2 Year 1
Net income $1,035,300 $892,500 $750,000 $641,000 $543,200
Interest expense 352,000 321,300 277,500 211,500 168,400
Income tax expense 331,296 249,900 210,000 166,660 130,368
Average total assets 6,901,990 6,099,497 5,215,736 4,440,104 3,785,106
Average stockholders' equity 2,347,619 2,109,929 1,851,852 1,647,815 1,448,533

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:

Industry Ratios
Return on total assets 19.8 %
Return on stockholders' equity 40.9 %
Times interest earned 4.6

Instructions:

Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

a. Return on total assets:

Year 5 ? %
Year 4 ? %
Year 3 ? %
Year 2 ? %
Year 1 ? %

b. Return on stockholders' equity:

Year 5 ? %
Year 4 ? %
Year 3 ? %
Year 2 ? %
Year 1 ? %

c. Times interest earned:

Year 5 ?
Year 4 ?
Year 3 ?
Year 2 ?
Year 1 ?

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