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    ratio analysis: Net income/total assets; Debt/total assets

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    6. XYZ Company posts the following results along with information from comparable companies.

    XYZ company Industry data
    Year Net income Total Assets (net income / total assets)
    1998 $350,000 $2,800,000 11.5%
    1999 375,000 3,200,000 8.4%
    2000 375,000 3,750,000 5.5%

    Year Debt Total Assets (debt / total assets) 1998 $1,624,000 $2,800,000 54.1%
    1999 1,730,000 3,200,000 42.0%
    2000 1,900,000 3,750,000 33.4%

    As an industry analyst comparing firms, are you more likely to praise or criticize XYZ company in terms of these indices and why:
    ? Net income / total assets?
    ? Debt / total assets?

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    https://brainmass.com/business/financial-ratios/ratio-analysis-net-income-total-assets-debt-total-assets-197389

    Solution Preview

    XYZ
    1998 1999 2000
    Net Income/Total Assets 12.50% 11.72% 11.72%
    Industry data 11.50% 8.40% 5.50%
    Comments Favorable Favorable Favorable
    (Its favorable as Company's ratios are better than ...

    Solution Summary

    This explains the steps to compute the ratio analysis: Net income/total assets; Debt/total assets

    $2.19

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