Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tour De las asker you want the prorry To Derman make corners o cunu year permanent as compare first-year performance. The following shows Dernham Inc.'s

image text in transcribed
Tour De las asker you want the prorry To Derman make corners o cunu year permanent as compare first-year performance. The following shows Dernham Inc.'s income statement for the last two years. The company had assets of $8,225 million in the first year and $13,157 million in the second year. Common equity was equal to $4,375 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) Year 2 Year 1 Net Sales 4,445 3,500 Operating costs except depreciation and amortization 1,855 1,723 Depreciation and amortization 222 140 Total Operating Costs 2,077 1,863 Operating Income (or EBIT) 2,368 1,637 Less: Interest 237 213 Earnings before taxes (EBT) 2,131 1,424 Less: Taxes (40%) 852 570 Net Income 1,279 854 Calculate the profitability ratios of Dernham Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Value Ratio Year 2 Year 1 46.77% Operating margin Net profit margin 28.7796 Tour De las asker you want the prorry To Derman make corners o cunu year permanent as compare first-year performance. The following shows Dernham Inc.'s income statement for the last two years. The company had assets of $8,225 million in the first year and $13,157 million in the second year. Common equity was equal to $4,375 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) Year 2 Year 1 Net Sales 4,445 3,500 Operating costs except depreciation and amortization 1,855 1,723 Depreciation and amortization 222 140 Total Operating Costs 2,077 1,863 Operating Income (or EBIT) 2,368 1,637 Less: Interest 237 213 Earnings before taxes (EBT) 2,131 1,424 Less: Taxes (40%) 852 570 Net Income 1,279 854 Calculate the profitability ratios of Dernham Inc. in the following table. Convert all calculations to a percentage rounded to two decimal places. Value Ratio Year 2 Year 1 46.77% Operating margin Net profit margin 28.7796

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Innovation In Public Transport Finance

Authors: Shishir Mathur

1st Edition

1138250139, 978-1138250130

More Books

Students also viewed these Finance questions

Question

10. How is microblogging relevant to business communication?

Answered: 1 week ago