Quantum Moving Company has the following data. Industry information also is show
ID: 2676378 • Letter: Q
Question
Quantum Moving Company has the following data. Industry information also is shownYEAR / NET INCOME / TOTAL ASSETS /NET INCOME/TOTAL ASSETS
2008 350,000 2,800,000 11.5%
2009 375,000 3,200,000 8.4
2010 375,000 3,750,000 5.5
YEAR / DEBT / TOTAL ASSETS / INDUSTRY DATA ON DEBT/TOTAL
2008 1,624,000 2,800,000 54.1
2009 1,730,000 3,200,000 42.0
2010 1,900,000 3,750,000 33.4
AS AN INDUSTRY ANALYST COMPARING THE FIRM TO THE INDUSTRY, ARE YOU LIKELY TO PRAISE OR CRITICIZE THE FIRM IN TERMS OF:
A. NET INCOME/TOTAL ASSETS
B. DEBT/TOTAL ASSETS
Explanation / Answer
Net Income/Total Asset
YEAR Quantum's Ratio(=income/asset) Industry Ratio
2008 12.5% 11.5%
2009 11.71% 8.4%
2010 10% 5.5%
Debt/Total Asset
YEARQuantum's Ratio(=debt/asset) Industry Ratio
2008 58% 54.1%
2009 54.06% 42%
2010 50.67% 33.4%
as the debt ratio of Quantum Moving Company os improving but not as rapid as industry ratio,so it is more likely to criticize than to praise.