Compute the ratio of net income to total assets

Question

Problem:

Jodie Foster Care Homes, Inc., shows the following:

Year    Net Income    Total Assets    Stockholder's Equity    Total Debt
2011    $118,000    $1,900,000    $700,000    $1,200,000
2012    131,000       1,950,000      950,000     1,000,000
2013    148,000       2,010,000    1,100,000       910,000
2014    175,700       2,050,000    1,420,000       630,000

a. Compute the ratio of net income to total assets for each year and comment on the trend.

b. Compute the ratio of net income to stockholder's equity and comment on the trend.

Explain why there may be a difference in trends between parts a and b.