Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,087,000 $937,100 $787,500 $673,100 $570,400 Interest expense 369,600 337,400 291,400 222,100 176,800 Income tax expense 347,840 262,388 220,500 175,006 136,896 Average total assets 8,936,196 7,916,149 6,785,535 5,812,987 4,981,333 Average stockholders' equity 2,969,945 2,692,816 2,386,364 2,143,631 1,901,333 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 % Return on stockholders' equity 33.4 % Times interest earned 4.6 Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place.
Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,087,000 $937,100 $787,500 $673,100 $570,400 Interest expense 369,600 337,400 291,400 222,100 176,800 Income tax expense 347,840 262,388 220,500 175,006 136,896 Average total assets 8,936,196 7,916,149 6,785,535 5,812,987 4,981,333 Average stockholders' equity 2,969,945 2,692,816 2,386,364 2,143,631 1,901,333 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 % Return on stockholders' equity 33.4 % Times interest earned 4.6 Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:eBook
E Print Item
Trend Analysis
Critelli Company has provided the following comparative information:
Year 5
Year 4
Year 3
Year 2
Year 1
Net income
$1,087,000
$937,100
$787,500
$673,100
$570,400
Interest expense
369,600
337,400
291,400
222,100
176,800
Income tax expense
347,840
262,388
220,500
175,006
136,896
Average total assets
8,936,196
7,916,149
6,785,535
5,812,987
4,981,333
Average stockholders' equity
2,969,945
2,692,816
2,386,364
2,143,631
1,901,333
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 %
Return on stockholders' equity
33.4 %
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:
Year 5
Year 4
%
Year 3
%
Check My Work
All work saved.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Trend Analysis
Critelli Company has provided the following comparative information:
| Year 5 | Year 4 | Year 3 | Year 2 | Year 1 | ||||||
| Net income | $940,300 | $810,600 | $681,200 | $582,200 | $493,400 | |||||
| Interest expense | 319,700 | 291,800 | 252,000 | 192,100 | 153,000 | |||||
| Income tax expense | 300,896 | 226,968 | 190,736 | 151,372 | 118,416 | |||||
| Average total assets | 5,779,817 | 5,103,704 | 4,360,748 | 3,704,785 | 3,153,171 | |||||
| Average |
1,975,420 | 1,769,869 | 1,548,182 | 1,373,113 | 1,203,415 |
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 | 21.5 % | |
| Return on stockholders’ equity | 44.4 % | |
| 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:
| Year 5 | fill in the blank 1 % |
| Year 4 | fill in the blank 2 % |
| Year 3 | fill in the blank 3 % |
| Year 2 | fill in the blank 4 % |
| Year 1 | fill in the blank 5 % |
b. Return on stockholders’ equity:
| Year 5 | fill in the blank 6 % |
| Year 4 | fill in the blank 7 % |
| Year 3 | fill in the blank 8 % |
| Year 2 | fill in the blank 9 % |
| Year 1 | fill in the blank 10 % |
c. Times interest earned:
| Year 5 | fill in the blank 11 |
| Year 4 | fill in the blank 12 |
| Year 3 | fill in the blank 13 |
| Year 2 | fill in the blank 14 |
| Year 1 |
fill in the blank 15
|
Solution
by Bartleby ExpertKnowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education