Crosby Company has provided the following comparative information
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Solvency and Profitability Trend Analysis
Crosby Company has provided the following comparative information:
20Y8 20Y7 20Y6 20Y5 20Y4 Net income $5,571,720 $3,714,480 $2,772,000 $1,848,000 $1,400,000 Interest expense 1,052,060 891,576 768,600 610,000 500,000 Income tax expense 1,225,572 845,222 640,320 441,600 320,000 Total assets (ending balance) 29,378,491 22,598,839 17,120,333 12,588,480 10,152,000 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 20Y8 for each of the graphs below. Use the amounts given above in your calculations. Round to one decimal place.
a. Return on total assets:
20Y8 fill in the blank 1 % 20Y7 fill in the blank 2 % 20Y6 fill in the blank 3 % 20Y5 fill in the blank 4 % 20Y4 fill in the blank 5 % b. Return on stockholders’ equity:
20Y8 fill in the blank 6 % 20Y7 fill in the blank 7 % 20Y6 fill in the blank 8 % 20Y5 fill in the blank 9 % 20Y4 fill in the blank 10 % c. Times interest earned:
20Y8 fill in the blank 11 20Y7 fill in the blank 12 20Y6 fill in the blank 13 20Y5 fill in the blank 14 20Y4 fill in the blank 15 d. Ratio of liabilities to stockholders' equity:
20Y8 fill in the blank 16 20Y7 fill in the blank 17 20Y6 fill in the blank 18 20Y5 fill in the blank 19 20Y4 fill in the blank 20 2. Refer to the selected industry ratios provided above. Overall, these ratios indicate financial performance coupled with use of debt (leverage).
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