Trend AnalysisCritelli Company has provided the following comparative information:Year 5Year 4Year 3Year 2Year 1Net income$1,352,800$1,166,200$980,000$837,600$709,800Interest expense460,000419,800362,600276,400220,000Income tax expense432,896326,536274,400217,776170,352Average total assets9,960,4408,811,1117,542,6976,439,3065,501,775Average stockholders' equity3,340,2473,013,4372,655,8272,372,8052,093,805You 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 RatiosReturn on total assets17.9 %Return on stockholders' equity37.3 %Times interest earned4.6Instructions:Calculate three ratios for Year 1 through Year 5. Round to one decimal place.

Ratio analysis is the process by which the financial performance of an entity can be analyzed with…

Answered: Trend Analysis Critelli Company has…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter1: The Role Of Accounting In Business

Section: Chapter Questions

Problem 1.4.2MBA: Return on assets The following data (in millions) were adapted from recent financial statements of...

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Similar questions

Return on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): What is Tootsie Roll’s percent of the cost of sales to sales? Round to one decimal place.
Gross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment. including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compute the average markup percent for Years 1 and 2. Round to one decimal place.
Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?
Analyze Target The following data (in millions) are taken from the financial statements of Target Corporation (TGT), the owner of Target stores: a. For Target, determine the amount of change in millions and the percent of change rounded to one decimal place from Year 1 to Year 2 for: 1. Revenue 2. Operating expenses 3. Operating income b. What conclusions can you draw from your analysis of the revenue and total operating expenses?
a Current fiscal year income from continuing operations, 11,9% of revenues Vertical analysis of income statement The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motors ports, Inc. (TRK), owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways. Current Year Previous Year Revenues: Admissions 90,639 100,694 Event related revenue 136,900 146,980 NASCAR broadcasting revenue 224,227 217,469 Other operating revenue 60,390 31,320 Total revenues 512,156 496,463 Expenses and other: Direct expense of events (102,786) (104,303) NASCAR event management fees (137,727) (133,682) Other direct expenses (43,764) (19,541) General and administrative (166,663) (288,166) Total expenses and other (450,960) (542392) Income from continuing operations 61,196 (46,229) a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Round percentages to one decimal place. b. Comment on the significant changes
Five measures of solvency or profitability The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following: Income before income tax was 3,000,000, and income taxes were 1,200,000 for the current year. Cash dividends paid on common stock during the current year totaled 1,200,000. The common stock was selling for 32 per share at the end of the year. Determine each of the following: (a) times interest earned ratio, (b) earnings per share on common stock, (c) price-earnings ratio, (d) dividends per share of common stock, and (e) dividend yield. Round ratios and percentages to one decimal place, except for per-share amounts.
Gross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment. including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compute the gross profit percent for Years 1 and 2. Round to one decimal place.
Gross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment, including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compare the results in parts (1) and (2) for Years 1 and 2. Comment on your comparison.

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