Sage Software 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:
2004–2008
Rate earned on total assets ..........15%
Rate earned on stockholders' equity .......25%
Number of times interest charges earned .....3.0
Ratio of liabilities to stockholders' equity ....1.5
Instructions
1. 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 two decimal places):
a. Rate earned on total assets
b. Rate earned on stockholders' equity
c. Number of times interest charges earned
d. Ratio of liabilities to stockholders' equity
Display 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).

2008 2007 2006 2005 2004 Net income Interest expense Income tax expense Total assets (ending balance 6,000,000 4,500,000 3,500,000 2,600,000 2,000,000 Total stockholders' equity $1,200,000 800,000 600,000 400,000 $ 300,000 200,000 360,000 170,000 240,000 150,000 180,000 120,000 120,000 100,000 90,000 (ending balance) Average total assets Average stockholders' equity 3,400,000 2,400,000 1,700,000 ,200,000 4,000,000 2,800,000 2,000,000 1,400,000 ,000,000 5,250,000 4,000,000 3,050,000 2,300,000 1,800,000 900,000