The following shows Sixty-Second Avenue Inc.'s income statement for the last two years. The company had...

  

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The following shows Sixty-Second Avenue Inc.'s income statement for the last two years. The company had assets of $11,750 million in the first year and $18,796 million in the second year. Common equity was equal to $6,250 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. Sixty-Second Avenue Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 6.350 5,000 1.610 1,495 318 200 1,928 4,422 597 3,825 956 2.869 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 Ratio Calculate the profitability ratios of Sixty-Second Avenue Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Operating margin Profit margin Return on total assets Return on common equity Basic earning power Value Year 2 45.18% 23.53% Year 1 66.10% 1,695 3.305 19.41% 36.50% 264 3,041 760 2,281 The following shows Sixty-Second Avenue Inc.'s income statement for the last two years. The company had assets of $11,750 million in the first year and $18,796 million in the second year. Common equity was equal to $6,250 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. Sixty-Second Avenue Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 6.350 5,000 1.610 1,495 318 200 1,928 4,422 597 3,825 956 2.869 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 Ratio Calculate the profitability ratios of Sixty-Second Avenue Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Operating margin Profit margin Return on total assets Return on common equity Basic earning power Value Year 2 45.18% 23.53% Year 1 66.10% 1,695 3.305 19.41% 36.50% 264 3,041 760 2,281

Answer rating: 100% (QA)

Profitability Ratios Operating Margin Year 1 Operating Margin Operating Income Net Sales 100 Operati... View the full answer