20Y6 20Υ8 20Υ7 20Y5 20Y4 $ 5,571,720 $ 1,848,000 $ 2,772,000 $ 3,714,480 $ 1,400,000 Net income Interest expense 1,052,060 891,576 610,000 500,000 768,600 320,000 Income tax expense 1,225,572 845,222 640,320 441,600 Total assets (ending balance) Total stockholders' equity (ending balance) 29,378,491 22,598,839 17,120,333 12,588,480 10,152,000 18,706,200 9,420,000 13,134,480 6,648,000 4,800,000 Average total assets Average total stockholders' equity 19,859,586 14,854,406 11,370,240 8,676,000 25,988,665 15,920,340 11,277,240 8,034,000 5,724,000 4,100,000
Crosby Company has provided the following comparative information:
Please see the attachment for details:
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
Times interest earned 3.4
Ratio of liabilities to stockholders’ equity 1.4
Instructions
1. Prepare four line graphs with the ratio on the vertical axis and the years on the horizontal axis for the following four ratios, rounding ratios and percentages to one decimal place:
a. Return on total assets
b. Return on stockholders’ equity
c. Times interest earned
d. Ratio of liabilities to stockholders’ equity
Display both the company ratio and the industry benchmark on each graph. That is, each graph should have two lines.
2. Prepare an analysis of the graphs in (1).
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