E13-2 (Algo) Computing and Interpreting Profitability Ratios [LO 13-4, LO 13-5] The average price of a gallon of gas in 2018 increased $0.30 (12.4 percent) from $2.42 in 2017 to $2.72 in 2018. Let's see whether these changes are reflected in the income statement of Daisy Petrolum Industries for the year ended December 31, 2018 (amounts in billions). Revenues Costs of Purchased Crude 011 and Products Other Operating Costs Income before Income Tax Expense Income Tax Expense Net Income Required: 2018 $ 290 2017 $246 166 132 87 99 37 15 11 $ 26 $15 1. Compute the gross profit percentage for each year. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Daisy likely to earn more or less gross profit from each dollar of sales in 2019? 2. Compute the net profit margin for each year. Did Daisy do a better or worse job of controlling expenses other than the costs of crude oil and products in 2018 relative to 2017? 3. Daisy reported average net fixed assets of $378 billion in 2018 and $376 billion in 2017. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017? 4. Daisy reported average stockholders' equity of $188 billion in 2018 and $184 billion in 2017. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2018 or 2017? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 1-a. Compute the gross profit percentage for each year. Note: Round percentage values to 1 decimal place. < Prev 7 of 15 Next > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 2 1-a. Compute the gross prone percentage for each year. Note: Round percentage values to 1 decimal place. 1-b. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Daisy likely to earn more or less gross profit from each dollar of sales in 2019? 1-a. 2017 gross profit percentage 1-a. 2018 gross profit percentage 1-b. Likely to eam in 20197 % Required 2 > Show less A Hin Print References Required 1 Required 2 Required 3 Required 4 2-a. Compute the net profit margin for each year. Note: Round percentage values to 1 decimal place. 2-b. Did Daisy do a better or worse job of controlling expenses other than the costs of crude oil and products in 2018 relative to 2017? 2-a 2017 net profit margin percentage 2-a. 2018 net profit margin percentage 2-b. Controling expenses in 2018 vs 2017? Show less & eBook Hint Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Print References 3-a. Daisy reported average net fixed assets of $378 billion in 2018 and $376 billion in 2017. Compute the fixed asset turnover ratios for both years. Note: Round your answers to 2 decimal places. 3-b. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017? 3-a. 2017 Fixed asset turnover 3-a 2018 Fixed asset turnover 3-b. Investment better utilized in 2018 or 2017? Show less A eBook Complete this question by entering your answers in the tabs below. Hin Required 1 Required 2 Required 3 Required 4 Print References 4-a. Daisy reported average stockholders' equity of $188 billion in 2018 and $184 billion in 2017. The company has not issued i preferred stock. Compute the return on equity ratios for both years. Note: Round percentage values to 1 decimal place. 4-b. Did the company generate greater returns for stockholders in 2018 or 2017? 4-a 2017 Return on equity (ROE) Percentage 4-a. 2018 Return on equity (ROE) Percentage 4-b. Greater returns generated in 2018 or 2017? % Show less