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Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,314,900 $1,133,500 $952,500 $814,100 $689,900
Critelli Company has provided the following comparative information:
Year 5 | Year 4 | Year 3 | Year 2 | Year 1 | ||||||
Net income | $1,314,900 | $1,133,500 | $952,500 | $814,100 | $689,900 | |||||
Interest expense | 447,100 | 408,100 | 352,400 | 268,700 | 213,900 | |||||
Income tax expense | 420,768 | 317,380 | 266,700 | 211,666 | 165,576 | |||||
Average total assets | 10,678,788 | 9,457,669 | 8,104,969 | 6,941,026 | 5,946,053 | |||||
Average stockholders' equity | 3,553,784 | 3,220,170 | 2,851,796 | 2,560,063 | 2,269,408 |
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 | 16.2 % | |
Return on stockholders' equity | 33.8 % | |
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:
b. Return on stockholders' equity:
c. Times interest earned:
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a Return on Total Assets ROA ROA Net Income Average Total Assets Year 1 ROA 689900 5946053 0116 or 1...Get Instant Access to Expert-Tailored Solutions
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