Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 8% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 23,000 160,000 300,000 6,000 489,000 820,000 $1,309,000 $ 250,000 300,000 550,000 $ 110,000 649,000 759,000 $1,309,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $2,200,000 Cost of goods sold 1,220,000 Gross margin 980,000 Selling and administrative expenses 610,000 Net operating income 370,000 Interest expense 24,000 Net income before taxes 346,000 Income taxes (30%) 103,800 Net income $ 242,200 Account balances at the beginning of the year were: accounts receivable, $190,000; and inventory, $270,000. All sales were on account. Assets at the beginning of the year totaled $1,000,000, and the stockholders' equity totaled $675,000. Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? % 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity 5. Financial Leverage % %