Answer and Explanation:
Return on Total Assets = Net Income/Average total assets
For 20Y8
Net income/Average total assets = 273,000/4417178 = 6.18%
Return on stockholder's equity
= Net income/average total stockholder's equity
For 20Y8
273,000/3569855 = 7.64%
Time interest earned
=Net income - Interest Expense - Income tax Expense/Interest Expense
=273,000 -616047 - 31,749 / 616,047
= -0.608
The ratios calculated above when measured by the industry ratio shows that Addai Company is not performing well. The ROA is less than the industry ratios which is basically how well the company is earning in respect to its total assets.
ROE states how well the company is earning in respect to the investments invested by the shareholders. The ratio is not good as compared to the industry ratios .
Times interest ratio tells you basically if the company is able to pay its interest. But the ratio states it isn't doing well.
