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Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of

Profitability ratios help in the analysis of the combined impact of liquidity ratios, 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 Dernham Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Dernham 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. Dernham Inc. Income Statement For the Year Ending on December 31(Millions of dollars)/r/n Calculate the profitability ratios of Dernham Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places.

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