Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer ASAP Kate has been asked to calculate the profitablity ratios of Blue Hamster Manufacturing, Inc. and make comments on its second-year performance as

please answer ASAP image text in transcribed
image text in transcribed
Kate has been asked to calculate the profitablity ratios of Blue Hamster Manufacturing, Inc. and make comments on its second-year performance as compared to its first-year performance. The following shows Blue Hamster's income statement for the last two years. The company had assets of $7,050,000 in the first year and $11,277,600 in the second year. Common equity was equal to $3,750,000 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. Assignment: Chapter 02 Analysis of Financial Statements Given the income statements, calculate the profitablity ratios of Blue Hamster Manufacturing, Inc. Which of the following statements are true about profitability ratios? Check all that apply. A higher operating profit 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 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions