cha 04 analysis #5

Randall and Arts Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Calculate the profitability ratios of gandall and Arts Inc. in the following table. Convert all calculations to a percentage rounded to two decimal ploces Decision makers and analysts look deeply into prontability ratios to identify trends in a company's profitability. Profrtability raties give insights into both the survivability of a company and the benefits that shareholders receive. Identify which of the following staternents are true about prolitability ratios. Check ail that apply. A higher operating margin than the inoustry average indicates either lower operating costs, higher product pricing, or beth. If a company operating margin increases but its proft margh decreases, it could mean that the company paid more in interest or taxes. An increase in a company's earnings means that the profit margin is increasing. Decision makers and analysts look deeply into profitability ratios to identify trends in a company's profitability. Prafitability ratios give insights into both the survivability of a company and the benefits that shareholders receive. Identify which of the following statements are true about profitabiity. ratios. Check all that apply. A higher operating margin than the industry average indicates either lower operating costs, higher praduct pricing, or both If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes: An increase in a company's earnings means that the profit margin is increasing: If a company issues new common shares but its net income does not increase, return on common equity will increase