7-38 Financial Ratios The annual reports of Milano SpA, an Italian clothing chain, included the following selected data (in millions): 20x2 20X1 20XO 90* 25 60 380 520 200 980 300 295 Annual amounts: Net income Gross margin on sales Cost of goods sold Operating expenses Income tax expense Dividends declared and paid End-of-year amounts: Long-term assets Long-term debt Current liabilities Cash Accounts receivable Merchandise inventory Paid-in capital Retained income * is the European euro. 240 220 180 35 120 205/ 110 55 During each of the three years, 10 million shares of common stock were outstanding. Assume that all sales were on account and that the applicable market prices per share of stock were 90 for 20X1 and 117 for 20X2. 1. Compute each of the following for each of the last two years, 20X1 and 20X2: a. Rate of return on sales Rate of return on stockholders' equity c. Current ratio d. Ratio of total debt to stockholders' equity e. Ratio of current debt to stockholders' equity f. Gross profit rate