Addai Company has provided the following comparative information: 20Y8 20Y7 20Y6 20Y5 20Y4 Net income $1,078,700 $929,900 $781,400 $667,900 $566,000 Interest expense 366,800 334,800 289,100 220,400 175,500 Income tax expense 345,184 260,372 218,792 173,654 135,840 Total assets (ending balance) 8,226,651 8,779,231 6,276,721 6,620,869 5,020,826 Total stockholders' equity (ending balance) 2,543,681 3,148,667 2,003,133 2,553,135 1,531,881 Average total assets 8,502,941 7,527,976 6,448,795 5,517,391 4,722,930 Average stockholders' equity 2,846,174 2,575,900 2,278,134 2,042,508 1,808,307 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 16.7% Return on stockholders’ equity 34.7% Times interest earned 4.6 Ratio of liabilities to stockholders' equity 2.1 Required: 1. Determine the following for the years 20Y4 through 20Y8. Round to one decimal place: a. Return on total assets: 20Y8 fill in the blank % 20Y7 fill in the blank % 20Y6 fill in the blank % 20Y5 fill in the blank % 20Y4 fill in the blank % b. Return on stockholders’ equity: 20Y8 fill in the blank % 20Y7 fill in the blank % 20Y6 fill in the blank % 20Y5 fill in the blank % 20Y4 fill in the blank % c. Times interest earned: 20Y8 fill in the blank % 20Y7 fill in the blank % 20Y6 fill in the blank % 20Y5 fill in the blank % 20Y4 fill in the blank %
Solvency and Profitability Trend Analysis
Addai Company has provided the following comparative information:
| 20Y8 | 20Y7 | 20Y6 | 20Y5 | 20Y4 |
| Net income | $1,078,700 | $929,900 | $781,400 | $667,900 | $566,000 |
| Interest expense | 366,800 | 334,800 | 289,100 | 220,400 | 175,500 |
| Income tax expense | 345,184 | 260,372 | 218,792 | 173,654 | 135,840 |
| Total assets (ending balance) | 8,226,651 | 8,779,231 | 6,276,721 | 6,620,869 | 5,020,826 |
| Total |
2,543,681 | 3,148,667 | 2,003,133 | 2,553,135 | 1,531,881 |
| Average total assets | 8,502,941 | 7,527,976 | 6,448,795 | 5,517,391 | 4,722,930 |
| Average stockholders' equity | 2,846,174 | 2,575,900 | 2,278,134 | 2,042,508 | 1,808,307 |
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 | 16.7% |
| Return on stockholders’ equity | 34.7% |
| Times interest earned | 4.6 |
| Ratio of liabilities to stockholders' equity | 2.1 |
Required:
1. Determine the following for the years 20Y4 through 20Y8. Round to one decimal place:
a. Return on total assets:
20Y8 fill in the blank %
20Y7 fill in the blank %
20Y6 fill in the blank %
20Y5 fill in the blank %
20Y4 fill in the blank %
b. Return on stockholders’ equity:
20Y8 fill in the blank %
20Y7 fill in the blank %
20Y6 fill in the blank %
20Y5 fill in the blank %
20Y4 fill in the blank %
c. Times interest earned:
20Y8 fill in the blank %
20Y7 fill in the blank %
20Y6 fill in the blank %
20Y5 fill in the blank %
20Y4 fill in the blank %
d. Ratio of liabilities to stockholders' equity:
20Y8 fill in the blank %
20Y7 fill in the blank %
20Y6 fill in the blank %
20Y5 fill in the blank %
20Y4 fill in the blank %
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