Quantum Moving Company has the following data Industry infor

Quantum Moving Company has the following data. Industry information also is shown Company data Year Net Income Total Assets 20X1 $ 424,000 2,843,000 20X2 20X3 Industry Data on Net Income/Total Assets 14.0% 9.8 3.9 428,000 412,000 3,267,000 3,834,000 Industry Data on Debt Total Assets Year 20X1 $1,722,000 $ 2,843,000 20X2 20X3 Debt Total Assets 1,732,000 1,950,000 3,267,000 3,834,000 56.6% 42.0 38.0 a. Calculate the company\'s data in terms of: (Input your answers as a percent rounded to 1 decimal place.) 20X1 20X2 20X3 Net income/Total assets Debt/Total assets b. As an industry analyst comparing the firm to the industry, are you likely to praise or criticize the firm in terms of Praise/Criticize Net income/Total assets Debt/Total assets

Solution

A. Net income/ Total Assets:

20X1 = 424000/2843000 =14.9%

20X2= 428000/3267000 = 13.1%

20X3= 412000/3834000= 10.7%

Debt/Total Assets

20X1= 1722000/2843000= 60.6%

20X2 = 1732000/3267000= 53%

20X3 = 1950000/3834000 = 50.9%

B. Net Income / Total Assets = Praise ( since it is greater than the industry average)

Debt/Total Assets= Critical (ideally debt is should be lesser than compared to the proportion of assets, higher debt ratio shows burden on company to pay off debts)