Solvency and profitability trend analysis Crosby Company has provided the following comparative information: Net income Interest expense Income tax expense Total assets (ending balance) 20Y8 20Y7 20Y6 20Y5 20Y4 $5,571,720 $3,714,480 $2,772,000 $1,848,000 $1,400,000 1,052,060 1,225,572 891,576 845,222 768,600 640,320 610,000 500,000 441,600 320,000 Total stockholders' equity (ending balance) Average total assets Average total stockholders' equity 29,378,491 22,598,839 17,120,333 12,588,480 10,152,000 18,706,200 13,134,480 9,420,000 6,648,000 4,800,000 25,988,665 19,859,586 14,854,406 11,370,240 8,676,000 15,920,340 11,277,240 8,034,000 5,724,000 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: 4,100,000 20Y4-20Y8 Return on total assets Return on stockholders' equity Times interest earned 19% 26% 3.4 Ratio of liabilities to stockholders' equity Required: 1.4 1. Determine the following for the years 20Y4 through 20Y8 for each of the graphs below. Use the amounts given above in your calculations. Round your answers to one decimal place. a. Return on total assets: a. Return on total assets: Return on Total Assets 20Y8 20Y7 20Y6 20Y5 20Y4 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 20Y8 20Y7 % % % % do do do do do % 20Y6 Year 20Y5 20Y4 Company's return on total assets -Industry return on total assets b. Return on stockholders' equity: Return on Stockholders' Equity 20Y8 20Y7 20Y6 20Y5 20Y4 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 20Y8 20Y7 2016 2015 20Y4 Year c. Times interest earned: % % % % % do do do do do -Company's return on stockholders' equity Industry return on stockholders' equity 20Y8 20Y7 20Y6 20Y5 Times Interest Earned c. Times interest earned: 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 20Y8 2017 20Y6 20Y5 20Y4 Year -Company's times interest eamed -Industry times interest earned 20Y4 d. Ratio of liabilities to stockholders' equity: d. Ratio of liabilities to stockholders' equity: 1.6 1.4 Ratio of Liabilities to Stockholders' Equity 1.2 1.0 $0.8 20.6 0.4 $ 0.2 0.0 20Y8 20Y7 20Y6 20Y5 20Y4 20Y8 20Y7 20Y6 20Y5 20Y4 Year -Company's liabilities to equity -Industry liabilities to equity 2. Refer to the selected industry ratios provided above. Overall, these ratios indicate financial performance coupled with use of debt (leverage).