Aa 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 ratios of Demham Inc. and make comments on its second-year performance as compared to its first-year performance. The following shows Denham Inc. 's income statement for the last two years. The company had assets of $8,225 million in the first year and $13,157 million in the second year. Common equity was equal to $4,375 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. Dernham Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 4,445 3,500 Operating costs except depreciation and amortization 1,365 1,268 Depreciation and amortization 222 140 Total Operating Costs 1,587 1,408 Operating Income (or EBIT) 2,858 2,092 Less: Interest 286 167 Earnings before taxes (EBT) 2,572 1,925 Less: Taxes (40 % ) 1,029 770 Net Income 1,543 1,155 Calculate the profitability ratios of Dermham Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Ratio Value Year 2 Year 1 Operating margin 59.77 % Profit margin 34.71% Return on total assets 14.04 % Return on common equity 26.40% Basic earning power 21.72 % Decision makers and anabests look deeply into nrofitability catios to ident6 trends in a company's profitability