Chapter 3, Problem 28P

a.

Summary Introduction

To calculate: The ratio of the Quantum Moving Company’s net income to its total assets for the years 20X1, 20X2 and 20X3, and then compare them to industry ratios.

Introduction:

The ratio of net income to total assets:

It is used to compute the return on assets for a firm. It shows the efficiently with which a company uses its assets for the generation of profits.

b.

Summary Introduction

To calculate: The ratio of debt to total assets of the Quantum Moving Company for the years 20X1, 20X2 and 20X3, and then compare them to the industry ratios.

Introduction:

Debt to total asset Ratio:

It shows the financial leverage of a company and the part of the assets of the company that are financed by the creditors.