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***I need all parts answered!*** The following shows Spandust Industries Inc.'s income statement for the last two years. The company had assets of $11,750 million
***I need all parts answered!***
The following shows Spandust Industries 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 million 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 Spandust Industries Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 6,350 1,610 318 1,928 4,422 442 3,980 1,592 2,388 Year 1 5,000 1,495 200 1,695 3,305 347 2,958 1,183 1,775 Net Sales 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 Spandust Industries Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places Ratio Value Operating margin Profit margin Return on total assets Return on common equity Basic earning power Year 2 69.64% 37.61% 12.71% 34.01% 23.53% Year 1 66.10% 35.50% 15.11% 28.40% Decision makers and analysts look deeply into profitability ratios to identify trends in a company's profitability Profitability 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 profitability ratios. Check all that apply If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales An increase in the return on assets ratio implies an increase in the assets a firm owns X If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes If a company issues new common shares but its net income does not increase, return on common equity will increaseStep by Step Solution
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