Problem: Jodie Foster Care Homes, Incorporated shows the following data:
Year Net Income Total Assets Stockholders' Equity Total Debt
201 $118,000 $1,900,000 $700,000 $1,200,000
2013 131,000 1,950,000 950,000 1,000,000
2014 148,000 2,010,000 1,100,000 910,000
2015 175,700 2,050,000 1,420,000 630,000
Q1. Compare the ratio of net income to total assets for each year and comment on the trend.
Q2. Compute the ratio of net income to stockholders' equity and comment on the trend. Explain why there may be a difference in the trends between parts a and b.