Requirement 1:
Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:
- Profit margin ratio
Rate of return on total assets- Asset turnover ratio
- Rate of return on common
stockholders’ equity - Earnings per share
- Dividend payout
To calculate: Profit margin ratio for 2019 and 2018.
Requirement 2:
To calculate: Rate of return on total assets for 2019 and 2018.
Requirement 3
To calculate: Asset turnover ratio for 2019 and 2018.
Requirement 4
To calculate: Rate of return on common stockholders’ equity for 2019 and 2018.
Requirement 5
To calculate: Earnings per share for 2019 and 2018
Requirement 6
To calculate: Dividend payout ratio for 2019.
Requirement 7:
To determine: Company’s operating performance:
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