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Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management...

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Finance

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Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to caiculate the profitability ratios of Dernham Inc. and make comments on its second-year performance as compared with its tirst-year performance: The following shows Demham Inc. S income statement for the last two years. The company had assets of $10,575 million in the rirst year and $16,916m illion in the second year. Common equity was equal to $5,625 million in the first year, and the company distributed 1 innn as dividends during the first and the second years. In addition, the firm did not issue new stock during either year

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