PR 14-5A Solvency and profitability trend analysis Itzkoff Company has provided the following comparative information: Net income Interest expense Income tax expense Total assets (ending balance) Total stockholders equity (ending balance) Average total assets Average stockholders equity $ 2012 2011 $ 229,985 325,002 83,179 5,624,113 2,476,970 5,356,904 2,361,977 2010 $ 394,485 300,094 166,358 5,089,695 2,246,985 4,821,098 2,049,743 2009 $ 552,500 281,250 124,800 4,552,500 1,852,500 4,151,250 1,576,250 2008 $ 500,000 250,000 156,000 3,750,000 1,300,000 3,375,000 1,050,000 170,879 350,027 49,492 6,023,425 2,647,848 5,823,769 2,562,409 Chapter 14 Financial Statement Analysis 631 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: Instructions 20082012 Rate earned on total assets 11% Rate earned on stockholders equity 16% Number of times interest charges earned 3.1 Ratio of liabilities to stockholders equity 1.5

In addition to the problem documentation, prepare a 2-3 page summary in which you analyze your results. Support your paper with minimum of one (1) scholarly resource. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Length: 3-5 pages not including title and reference pages