Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 2017 2016 20Y5 2014 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 4,124,350 3,732,443 3,338,500 2,750,000 4,417,178 3,706,557 3,433,152 3,065, 176 2,434,000 1,550,000 Total assets (ending balance) Total stockholders' equity (ending balance) Average total assets Average total stockholders' equity 4,270,764 3,928,396 3,044,250 2,475,000 3,535,472 2,749,588 3,569,855 3,249,164 1,992,000 1,150,000 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: 2014-2018 Return on total assets 28% Return on stockholders' equity 18% Times interest earned 2.7 Ratio of liabilities to stockholders' equity 0.4 Required: 1. Determine the following for the years 2014 through 2048 for each of the graphs below. Use the amounts given above in your calculations. Round to one decimal place: a. Return on total assets: 60.0% 50.0% 40.0% Return on Total Assets 30.0% 20.0% 10.0% 0.0% 2018 2017 2016 2045 2014 Year - Company's retum on total assets +Industry return on total assets 20Y8 6.40 X % 2017 9.4 X % 2016 17.9 X % 2045 29.0 X % 2014 32.3 X % 70.0% 60.0% 50.0% Return on Stockholders' Equity 40.0% 30.0% 20.0% 10.0% 0.0% 20Y8| 20Y7 2016 20Y5 2014 20Y4 -- Company's retum on stockholders' equit - Industry return on stockholders' equity Times interest earned: 3.5 3.0 2.5 2.0 ) Times Interest Earned Ratio 1.5 1.0 0.5 0.0 2048 2017 20YG 2045 2014 Company's times interest eamed +Industry times interest earned Hill d. Ratio of liabilities to stockholders' equity: 0.9 0.8 0.7 0.6 D 0.5 Ratio of Liabilities to Stockholders' Equity 0.4 0.3 0.2 0.1 0.0 20Y8 2017 2044 2046 2045 Year -Company's liabilities to equity Industry liabilities to equity 20Y8 2047 2016 llll 2015 20Y4