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5. Profitability ratios Profitabiliky ratios help in the analysis of the combined impact of liquldity ratios, asset management ratios, and debt management ratios on the

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5. Profitability ratios Profitabiliky ratios help in the analysis of the combined impact of liquldity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitabllity ratios of Spandust industries inc: and make comments on its second-year performance as compared with is first-year performance. and $9,398 million in the second year. Common equity was equal to $3,125 milion in the first year, and the company distributed 100% of its eamings out as dividends during the first and the second years. In adetion, the firm did not lssue new stock during either yeat, Spandust Industries Inc. Income Statement For the Year Ending on December 31 (Millions of doliars) Calcutate the proftability ratios of Spandust Industries inc, in the following table. Convert all calculations to a percentage rounded to two decimal places. Deosion makers and analysts look deeply into profitability ratios to identify trends in a company's profitability. Profitability ratios give insighes into both the survivability of a company and the benefias that shareholders receive. Identify which of the following statements are true about profitability rotios. Check all that apply. If a company has a proft margin of 10%, it means that the company eamed a net income of $0.10 for each dollar of sales. If a company's operating margin increases but its profit margia decreases, it could mean that the company pald more in interent ar tanes. An increase in a company's earnings means that the profit margin is increasing

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