Exercise 12-81 Profitability Ratios Financial statements for Steele Inc. follow. 2017 $6,149,218 (4,355,675) $1,793,543 (1,080,843) Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 Net sales $7,245,088 $6,944,296 Cost of goods sold (5,286,253) (4,953,556) Gross margin $1,958,835 $1,990,740 General and administrative expenses (1,259,896) (1,202,042) Special and nonrecurring items 2,617 Operating income $701,556 $788,698 Interest expense (63,685) (62,398) Other income 7,308 10,080 Gain on sale of investments 9,117 Income before income taxes $645,179 $745,497 Provision for income taxes (254,000) (290,000) Net income $391,179 $455,497 0 0 $712,700 (63,927) 11,529 0 0 $660,302 (257,000) $403,302 Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2019 Dec 31, 2018 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700 803,707 Other 109,456 101,811 Total current assets $2,220,625 $1,784,130 Property and equipment, net 1,666,588 1,813,948 Other assets 247,892 248,372 Total assets $4,135,105 $3,846,450 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $250,363 $309,092 Accrued expenses 347,892 274,220 Other current liabilities 15,700 0 Income taxes 93,489 137,466 Total current liabilities $707,444 $720,778 Long-term debt 650,000 541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities 1,693,812 1,578,833 Stockholders' equity: Preferred stock $100,000 $100,000 Common stock 89,727 89,727 Additional paid-in capital-common stock 128,906 127,776 Retained earnings 2,397,112 2,136,794 $2,715,745 $2,454,297 Less: Treasury stock, at cost (274,452) (186,680) Total stockholders' equity $2,441,293 $2,267,617 Total liabilities and stockholders' equity $4,135,105 $3,846,450 Statement Item Total assets Total stockholders' equity January 1, 2018 (in thousands) $3,485,233 2,083,122 Required: Compute the five profitability ratios for 2018 and 2019. Round intermediate calculations and final answers to two decimal places. 2019 2018 Gross profit percentage 27.04 % 28.67 % Operating margin percentage 9.68 % Net profit margin percentage 5.40 % 6.56 % 11.36 % Return on assets X % X % Return on equity 16.61 % 20.94 %