Lancelot Company has provided the following comparative information: 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: 2006??2010Rate earned on total assets.......... 15%Rate earned on stockholders?? equity....... 18%Number of times interest charges earned...... 3.5Ratio of liabilities

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Lancelot Company has provided the following comparative information:

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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: 2006??2010Rate earned on total assets.......... 15%Rate earned on stockholders?? equity....... 18%Number of times interest charges earned...... 3.5Ratio of liabilities to stockholders?? equity.... 1.4Instructions1. Prepare four line graphs with the ratio on the vertical axis and the years on the horizontal axis for the following four ratios (rounded to one decimal place):a. Rate earned on total assetsb. Rate earned on stockholders?? equityc. Number of times interest charges earnedd. Ratio of liabilities to stockholders?? equityDisplay 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).

Related Book For answer-question

Survey of Accounting

5th Edition

Authors: Carl S Warren

ISBN: 978-0538749091