Profftability ratios help in the analysis of the combined impact of liquidity ratlos, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Stay Swift Corp. and make comments on its second-year performance as compared with its first-year performance The following shows Stay Swift Corp. 's Income statement for the last two years. The company had assets of $4,700 million in the first year and 57,518 million in the second year. Common equity was equal to $2,500 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. Stay Swift Corp. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 2.540 2,000 Operating costs except depreciation and amortization 1,855 1,723 Depreciation and amortization 127 80 Total Operating Costs 1,982 1,803 Operating Income (or EBIT) 558 197 Less Interest 25 21 Earnings before taxes (EBT) 176 Less Taxes (40%) 193 70 Net Income 290 106 Calculate the profitability ratlos of Stay Swift Corp. In the following table. Convert al calculations to a percentage rounded to two decimal places Ratio Value Year 2 Year 1 9.85% 11.42% Operating margin Profit margin Return on total assets Return on common equity Basic earning power 2.269 4.24% 7.42% Decision makers and analysts look deeply into profitability ratios to identity trends in a company's profitability. Profitability ratios qive insights into both the survivability of a company and the benefits that shareholders receive. Identity 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 cared a net income of $0.10 for each dotar of sales 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 the retum on assets ratio implies an increase in the assets a firm owns If a company issues new common shares but its net income does not increase, return on common equity will increase