The following shows Blue Sky Drone's income statement for the last two years. The company had assets of $$10,575$ million in the first year and

$$16,916\mathrm{.}40$ million in the second year. Common equity was equal to $$5,625$ 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.

Blue Sky Drone Company Income Statement For the Year Ending on December $31($Millions of dollars$)$The following shows Blue Sky Drone's income statement for the last two years. The company had assets of $$10,575$ million in the first year and

$$16,916\mathrm{.}40$ million in the second year. Common equity was equal to $$5,625$ 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.

Blue Sky Drone Company Income Statement For the Year Ending on December $31($Millions of dollars$)$

Calculate the profitability ratios of Blue Sky Drone Company in the following table. Convert all calculations to a percentage rounded to two decimal places.

Ratio Value

Year $2$ Year $1$

Operating profit margin $??57\mathrm{.}71\%$

Net profit margin $33\mathrm{.}77\%??$

Return on total assets $??13\mathrm{.}18\%$

Return on common equity $??24\mathrm{.}78\%$

Basic earning power $21\mathrm{.}13\%??$

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$.$A higher operating profit margin than the industry average indicates either lower operating costs, higher product pricing, or both.

b$.$If a company$$s operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.

c$.$An increase in the return on assets ratio implies an increase in the assets a firm owns.

d$.$If a company issues new common shares but its net income does not increase, return on common equity will increase.