Question:

The following shoes Spandust Ind. income statement for the last 2 years. The company has assets of $10,575 million in the 1st year and $16,916 million in the 2nd year. Common equity was equal to $5,625 million in the 1st 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.

net sales	year 2: 5,715	year 1: 4,500
operating costs except depreciation and amortization	1,120	1,040
depreciation and amortization	286	180
total operating costs	1406	1,220
operating income or (EBIT)	4,309	3,280
less; interest	431	262
earnings before taxes (ebit)	3,878	3,018
less: taxes (40%)	1,551	1,207
net income	2,327	1,811

Calculate the profitability ratios of Spandust inc in the following table. Convert all calculations to a % round to 2 decimal places.

operating margin	year 2: (need answer)	year 1: 72.89%
profit margin	40.72%	(need answer)
return on total assets	need answer	17.13%
return on common equity	need answer	32.20%
Basic earning power	25.47%	need answer

Identify which of the following statments 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.

-an increase in a compnays earnings means that the profit margin is increasing

-if a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.

-if a company issues new common shares but its net income does not increase, return on commonequity will increase.

NEED ALL PARTS ANSWERED