Liabilities and Shareholders' Equity Why has the profit margin ratio changed over the three years? Incorporate in vour answer any conclusions you made when analyzing the gross profit margin in part (b) above. eTextbook and Media Assume that common shareholders' equity at the end of 2018 was equal to the amount for 2019 . Why is the return on common shareholders' equity different from the return on assets? Why does the difference between these two ratios change? The costs paid for inventory purchased from suppliers have changed little over the three years but there is significant competition in the industry. How has this affected the gross profit ratio? \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{PRONGHORNLTD.StatementofIncomeYearEndedDecember31(inthousands)} \\ \hline & 2021 & 2020 & 2019 \\ \hline Sales & $4,500 & $4,000 & $3,600 \\ \hline Cost of goods sold & 2,500 & 2,100 & 1,800 \\ \hline Gross profit & 2,000 & 1,900 & 1,800 \\ \hline Operating expenses & 1,450 & 1,475 & 1,490 \\ \hline Income from operations & 550 & 425 & 310 \\ \hline Interest expense & 190 & 130 & 70 \\ \hline Income before income tax & 360 & 295 & 240 \\ \hline Income tax expense & 90 & 75 & 60 \\ \hline Net income & $270 & $220 & $180 \\ \hline \end{tabular} Comment on whether the company's overall liquidity has improved or worsened over this three-year period and support your explanation by relating the results of the turnover ratios to the current ratio. Condensed statements of financial position and statement of income data for Pronghorn Ltd. are shown below: Why has the payout ratio changed? Do you think that the dividend payout has affected the company's liquidity? Why or why not? What strategy pertaining to leverage has the company pursued? Is the company more or less solvent in 2021 than it was in 2019 ? What is the major driver of the company's return on assets