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Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Υ8 20Y7 20Υ6 20Y5 20Y4 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 Total assets (ending balance) 4,417,178 4,124,350 3,782,443 3,338,500 2,750 000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 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: 20Y4-20Y8 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 20Y4 through 20Y8 for each of the graphs below. Use the jampunts givenabove in yout galculations. Round to one deaimaP

Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Υ8 20Y7 20Υ6 20Y5 20Y4 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 Total assets (ending balance) 4,417,178 4,124,350 3,782,443 3,338,500 2,750 000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 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: 20Y4-20Y8 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 20Y4 through 20Y8 for each of the graphs below. Use the jampunts givenabove in yout galculations. Round to one deaimaP

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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What's the return on stockholders equity for these years?
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Υ7 20Υ6 20Y5 20Υ4 Net income $273,406 S367,976 $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 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 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: 20Y4-20Y8 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 20Y4 through 20Y8 for each of the graphs balow. Use the amounts givenabove in your galculations. Round to one decimal place:
Transcribed Image Text:Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Y8 20Υ7 20Υ6 20Y5 20Υ4 Net income $273,406 S367,976 $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 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 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: 20Y4-20Y8 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 20Y4 through 20Y8 for each of the graphs balow. Use the amounts givenabove in your galculations. Round to one decimal place:
b. Return on stockholders' equity: 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 20Υ8 20Υ7 20Y6 20Y5 20Y4 Year -Company's return on stockholders equity Industry return on stockholders equity 20Υ8 % 20Υ7 % 20Y6 % 20Y5 20Y4 c. Times interest earned: Return on Stockholders' Equity
Transcribed Image Text:b. Return on stockholders' equity: 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 20Υ8 20Υ7 20Y6 20Y5 20Y4 Year -Company's return on stockholders equity Industry return on stockholders equity 20Υ8 % 20Υ7 % 20Y6 % 20Y5 20Y4 c. Times interest earned: Return on Stockholders' Equity
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