Solvency and profitability Trend Analysis Crosby Company has provided the following comparative information: 20Y8 2017 2046 2015 2014 Net income $5,571,720 $3,714,480 $2,772,000 $1,848,000 $1,400,000 Interest expense 891,576 768,600 610,000 500,000 1,052,060 1,225,572 Income tax expense 845,222 640,320 441,600 320,000 29,378,491 22,598,839 17,120,333 12,588,480 10,152,000 Total assets (ending balance) Total stockholders' equity (ending balance) 18,706,200 13,134,480 9,420,000 6,648,000 4,800,000 Average total assets 25,988,665 19,859,586 14,854,406 11,370,240 8,676,000 Average total stockholders' equity 15,920,340 11,277,240 8,034,000 5,724,000 4,100,000 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: 20Y4-20Y8 Return on total assets 19% Return on stockholders' equity 26% Times interest earned 3.4 Ratio of liabilities to stockholders' equity 1.4 Required: 1. Determine the following for the years 20Y4 through 2048 for each of the graphs below. Use the amounts given above in your calculations. Round to one decimal 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: 30.0% 25.0% 20.0% Return on Total Assets 15.0% 10.0% 5.0% 0.0% 20Y8 2017 2046 2045 2014 Year Company's return on total assets +Industry return on total assets 2018 % 2017 % 2016 % 2UTO 2017 % 2016 % 2015 % 2014 % b. Return on stockholders' equity: 40.0% 35.0% 30.0% 25.0% Return on Stockholders' Equity 20.0% 15.0% 10.0% 5.0% 0.0% 20Y 2017 20YG 2015 2014 20.0% Return on Stockholc 15.0% 10.0% 5.0% 0.0% 20Y8 2014 2047 2016 2045 Year -Company's retum on stockholders' equity - Industry return on stockholders' equity 2018 % 2017 % 2016 llll % 2015 % 20Y4 % c. Times interest earned: 20.0% Return on Stockholc 15.0% 10.0% 5.0% 0.0% 20Y8 2014 2047 2016 2045 Year -Company's retum on stockholders' equity - Industry return on stockholders' equity 2018 % 2017 % 2016 llll % 2015 % 20Y4 % c. Times interest earned: limes interest earned: 8.0 7.0 6.0 5.0 W 4.0 Times Interest Earned 3.0 2.0 1.0 0.0 20Y8 2047 20Y6 2045 2014 Year Company's times interestearned Industry times interest eamed 20Y8 2017 111 20Y6 DO d. Ratio of liabilities to stockholders' equity: 1.6 1.4 1.0 0.8 Ratio of Liabilities to Stockholders' Equity 0.6 0.4 50.2 0.0 20Y8 2047 2014 2046 20Y5 Year Company's liabilities to equity Industry liabilities to equity 20Y8 I 20Y7 d. Ratio of liabilities to stockholders' equity: 1.6 1.4 1.0 0.8 Ratio of Liabilities to Stockholders' Equity 0.6 0.4 50.2 0.0 20Y8 2047 2014 2046 20Y5 Year Company's liabilities to equity Industry liabilities to equity 20Y8 I 20Y7
