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The comparison made for financial analysis between the various items reported on the financial statement is known as financial ratios. These ratios are used for making a summarized report on the company’s performance.

$\begin{array}{c}Returnonassets=\frac{NetIncome}{TotalAssets}×100\\ =\frac{\$58,333}{\$176,413+\$1,228,313}×100\\ =\frac{\$58,333}{\$1,404,726}×100\\ =4.15\%\end{array}$

$\begin{array}{c}Returnonequity=\frac{NetIncome}{Stockholdersequity}×100\\ =\frac{\$58,333}{\$176,413}×100\\ =33.06\%\end{array}$

$\begin{array}{c}Debttoassetsratio=\frac{\text{°Õ´Ç³Ù²¹±ô D±ð²ú³Ù²õ}}{\text{°Õ´Ç³Ù²¹±ô‼î²õ²õ±ð³Ù²õ}}\\ =\frac{\$1,228,313}{\$176,413+\$1,228,313}×100\\ =\frac{\$1,228,313}{\$1,404,726}×100\\ =87.44\%\end{array}$

2.The industry average return on common stock equity is 16%, and the actual return on the common stock company is generating equals 33.06%. It means that the company generates more profit for stockholders than industry averages.

Even if the company is performing well, the debt to the asset is very high, reflecting that investing in the company’s bonds is riskier. But the investors might be attracted to the convertible bonds because the return on equity is higher than might increase the price of the shares, and investors can generate gain from such an increase in the prices.

Under IFRS, the convertible bonds' equity and debt components of the convertible bonds are recorded separately. While under GAAP, these are not reported separately; therefore, the equity component of convertible bonds will be reported separately, which will affect the ratios.

$\begin{array}{c}Returnonassets=\frac{NetIncome}{TotalAssets}×100\\ =\frac{\$58,333}{\$176,413+\$1,228,313}×100\\ =\frac{\$58,333}{\$1,404,726}×100\\ =4.15\%\end{array}$

$\begin{array}{c}Returnonequity=\frac{NetIncome}{Stockholdersequity}×100\\ =\frac{\$58,333}{\$326,413}×100\\ =17.87\%\end{array}$

$\begin{array}{c}Debttoassetsratio=\frac{\text{°Õ´Ç³Ù²¹±ô D±ð²ú³Ù²õ}}{\text{°Õ´Ç³Ù²¹±ô‼î²õ²õ±ð³Ù²õ}}\\ =\frac{\$1,078,313}{\$176,413+\$1,228,313}×100\\ =\frac{\$1,078,313}{\$1,404,726}×100\\ =76.76\%\end{array}$