Your boss has asked you to calculate the profitability ratios of Blur Corp. and make comments on its second-year performance as compared to its first-year performance. The following shows Blur Corp.'s income statement for the last two years. The company had assets of $10,575 million in the first year and $16,916 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. Blur Corp. Income Statement for the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 5,715 4,500 Operating costs except 1,855 1,723 depreciation and amortization Depreciation and amortization 286 180 Total Operating Costs 2,141 1,903 Operating Income (or EBIT) 3,574 2,597 Less: Interest 357 273 Earnings before taxes (EBT) 3,217 2,324 Less: Taxes (40%) 1,287 930 Net Income 1,930 1,394 Calculate the profitability ratios of Blur Corp. in the following table. Convert all calculations to a percentage rounded to two decimal places. Value Ratio Year 2 Year 1 Operating margin 5771% Net profit 33.77% margin Return on total assets 13.18% Return on common equity 24.78% Basic earning power 21.13% 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 a company's earnings means that the net profit margin is increasing. If a company issues new common shares but its net income does not increase, return on common equity will increase