Petroxy Oil Co. Income Statement For the Year Ending on December 31 (Millions of dollars) Net Sales Year 2 Year 1 6,350 5,000 Operating costs except depreciation and amortization 1,120 1,040 Depreciation and amortization 318 200 Total Operating Costs 1,438 1,240 Operating Income (or EBIT) 4,912 3,760 Less: Interest 663 489 Earnings before taxes (EBT) 4,249 3,271 Less: Taxes (25%) 1,062 8181 Net Income 3,187 2,453 Calculate the profitability ratios of Petroxy Oil Co. in the following table. Convert all calculations to a percentage rounded to two decimal places. Ratio: Value Year 2 Year 1 Operating margin 75.20% Profit margin 50.19% Return on total assets 20.88% Return on common equity 39.25% Basic earning power 26.13% 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. A higher operating margin than the industry average indicates either lower operating costs, higher product pricing, or both. 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 profit margin is increasing. If a company issues new common shares but its net income does not increase, return on common equity will increase