Question: May you please answer? Thank you so much! :) Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios,

May you please answer? Thank you so much! :)
May you please answer? Thank you so much! :) Profitability ratios help
in the analysis of the combined impact of liquidity ratios, asset management

Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm Your boss has asked you to calculate the profitability ratlos of Stay Swift Corp. and make comments on its second-year performanct as compared with its first-year performance The following shows Stay Swift Corp.'s income statement for the last two years. The company had assets of $5,875 million in the first year and $9,398 million in the second year. Common equity was equal to $3,125 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Stay Swift Corp. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 3,175 1,610 Year 1 2,500 1,495 100 159 1,595 Net Sales Operating costs except depreciation and amortization Depreciation and amortization Total Operating costs Operating Income (or EBIT) Less: Interest Earnings before taxes (EBT) Less: Taxes (25%) Net Income 1,769 1,406 905 141 22 1,265 833 316 208 949 625 Calculate the profitability ratios of Stay Swift Corp. In the following table. Convert all calculations to a percentage rounded to two decimal places Ratio Value Year 2 Year 1 36.20% 29.89% Operating margin Profit margin Return on total assets Return on common equity Basic earning power 10.64% 20.00% 14.96% Decision makers and analysts look deeply into profitability ratios to identity trends in a company's profitability. Profitability ratios give insights into bath the survivability of a company and the benefits that shareholders receive. Identity which of the following statements are true about profitability ratios. Check all that apply. A higher operating margin than the Industry average indicates either tower operating costs, higher product pricing, or both, If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes An increase in a company's earnings means that the profit margin is increasing If a company issues new common shares but its net income does not increase, return on common equity will increase

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