The following shows Stay Swift Corp.'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. Stay Swift Corp. Income Statement for the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 6,350 5,000 Operating costs except depreciation and amortization 1,120 1,040 Depreciation and amortization 318 200 Total Operating Costs 1,438 1,240 Operating Income (or EBIT) 4,912 3,760 Less: Interest 491 301 Earnings before taxes (EBT) 4,421 3,459 Less: Taxes (25%) 1,105 865 Net Income 3,316 2,594 Calculate the profitability ratios of Stay Swift Corp. in the following table. Convert all calculations to a percentage rounded to two decimal places. Ratio Value Year 2 Year 1 75.20% Operating margin Profit margin 52.22% Return on total assets Return on common equity Basic earning power 22.08% 41.50% 26.13% Ratio Value Year 2 Year 1 75.20% 52.22% Operating margin Profit margin . Return on total assets Return on common equity 22.08% 41.50% Basic earning power 26.13% 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 higher operating 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 the return 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