Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Calculate the Profitability ratios of Randall and Arts Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Profitability
Calculate the Profitability ratios of Randall and Arts Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places.
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 firnm Your boss has asked you to calculate the profitability ratios of Randall and Arts Inc. and make comments on its second-year performance as compared to its first-year performance The following shows Randall and Arts 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 milion 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 Randall and Arts In Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Yar 1 5,000 1,268 200 1,468 3,532 459 3,073 1,229 1,844 Net Sales 6,350 1,365 318 1,683 4,667 467 4,200 1,680 2,520 Operating costs except depreciation and amortization Depreciation and amortization Total Operating Costs Operating Income (or EBIT) Less: Interest Earnings before taxes (EBT) Less: Taxes (40%) Net Income Calculate the profitability ratios of Randall and Arts Inc. in the following table. Convert all calculations to a percentage rounded to two decimal placesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started