Axle Inc. and Bandit Inc. are rivals in the manufacture of craft papers. Some

financial statement values for each company follow. Use them in a ratio analysis

that compares the firms$$ financial leverage and profitability.

Item Axle Bandit

Total assets $$12,000,000$ $$12,000,000$

Total equity $($all common$)$ $$8,000,000$ $$6,000,000$

Total debt $$4,000,000$ $$6,000,000$

Annual interest $$200,000$ $$400,000$

Total sales $$25,000,000$ $$25,000,000$

EBIT $$6,450,000$ $$6,450,000$

Earnings available for common stockholders $$3,290,000$ $$3,350,000$

$18.)$ Calculate net profit margin for Axle and Bandit.

A$)27\mathrm{.}42\%$; $27\mathrm{.}92\%$

B$)41\mathrm{.}13\%$; $55\mathrm{.}83\%$

C$)48\mathrm{.}00\%$; $48\mathrm{.}00\%$

D$)13\mathrm{.}16\%$; $13\mathrm{.}40\%$