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12. Lindas Clothing is a retailer of contemporary womens clothing. Selected financial information for Lindas appears below: Year 3 Year 2 Year 1 Net Income

12. Lindas Clothing is a retailer of contemporary womens clothing. Selected financial information for Lindas appears below: Year 3 Year 2 Year 1 Net Income $56,759 $31,150 $15,375 Total Assets at year-end $381,500 $246,250 $145,490 Weighted Average number of shares Outstanding 84,215 80,546 77,965 Total Liabilities at year-end 205,967 119,657 60,522 Common Stockholders' Equity at year-end $175,533 $126,593 $84,968 Interest Expense 165 195 258 Required: a. Compute the rate of return on assets for the years 1 to 3. Lindas has an effective tax rate of 35%. Please consider the effect of interest expense to calculate ROA. Show your calculations. b. Compute the rate of return on common shareholders equity for the years 1 to 3. Show your calculations

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