Eleanor has been asked to calculate the profitability ratios of Cute Camel Woodcraft Company and make comments on its second-year performance as compared to its first-year performance. The following shows Cute Camel's income statement for the last two years. The company had assets of $11,750,000 in the first year and $18,796,000 in the second year. Common equity was equal to $6,250,000 in the first year, 100% of earnings were paid out as dividends in the first year, and the firm did not issue new stock in the second year. Cute Camel Woodcraft Company Income Statements Years Ending December 31 Year Net Sales Operating costs less depreciation and amortization Depreciation and amortization Total Operating Costs Operating Income Interest Earnings before taxes Taxes (40%) Net Income Year 2 Year 1 $6,350,000 $5,000,000 1,610,000 1,495,000 317,500 200,000 $1,927,500 $1,695,000 $4,422,500 $3,305,000 597,038 347,025 $3,825,462 $2,957,975 1,530,185 1,183,190 $2,295,277 $1,774,785 Given the income statements, calculate the profitability ratios of Cute Camel Woodcraft Company Profitability Ratio Value Year 2 Year 1 Operating profit margin 66.10% Net profit margin 36.15% Return on total assets 15.10% Return on common equity 28.40% Which of the following statements are true about profitability ratios? Check all that apply. If a company has a net profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales. 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 net profit margin is increasing. If a company issues new common shares but its net income does not increase, return on common equity will increase