Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $1,095,200 $944,100 $793,400 $678,100 $574,700 Interest expense 372,400 339,900 293,600 223,800 178,200 Income tax expense 350,464 264,348 222,152 176,306 137,928 Average total assets 8,386,286 7,421,965 6,356,725 5,433,133 4,647,531 Average stockholders' equity 2,808,205 2,537,903 2,241,243 2,006,213 1,773,765 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: Industry Ratios Return on total assets 17.2 % Return on stockholders' equity 35.8 % Times interest earned 4.6 Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place. a. Return on total assets: Year 5 fill in the blank 1 % Year 4 fill in the blank 2 % Year 3 fill in the blank 3 % Year 2 fill in the blank 4 % Year 1 fill in the blank 5 % b. Return on stockholders' equity: Year 5 fill in the blank 6 % Year 4 fill in the blank 7 % Year 3 fill in the blank 8 % Year 2 fill in the blank 9 % Year 1 fill in the blank 10 % c. Times interest earned: Year 5 fill in the blank 11 Year 4 fill in the blank 12 Year 3 fill in the blank 13 Year 2 fill in the blank 14 Year 1 fill in the blank 15 provide a solution

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 19BEA

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Critelli Company has provided the following comparative information:

	Year 5	Year 4	Year 3	Year 2	Year 1
Net income	$1,095,200		$944,100		$793,400	$678,100	$574,700
Interest expense	372,400		339,900		293,600	223,800	178,200
Income tax expense	350,464		264,348		222,152	176,306	137,928
Average total assets	8,386,286		7,421,965		6,356,725	5,433,133	4,647,531
Average stockholders' equity	2,808,205		2,537,903		2,241,243	2,006,213	1,773,765

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:

	Industry Ratios
Return on total assets	17.2 %
Return on stockholders' equity	35.8 %
Times interest earned	4.6

Instructions:

Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

a. Return on total assets:

Year 5	fill in the blank 1 %
Year 4	fill in the blank 2 %
Year 3	fill in the blank 3 %
Year 2	fill in the blank 4 %
Year 1	fill in the blank 5 %

b. Return on stockholders' equity:

Year 5	fill in the blank 6 %
Year 4	fill in the blank 7 %
Year 3	fill in the blank 8 %
Year 2	fill in the blank 9 %
Year 1	fill in the blank 10 %

c. Times interest earned:

Year 5	fill in the blank 11
Year 4	fill in the blank 12
Year 3	fill in the blank 13
Year 2	fill in the blank 14
Year 1	fill in the blank 15

provide a solution

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