December 31 2016 2015 2014

Total assets $4,800,000 $4,400,000 $4,000,000

Notes payable (8% interest) 2,250,000 2,250,000 2,250,000

Common stock 250,000 250,000 250,000

Preferred 4% stock, $100 par (no change during year) 500,000 500,000 500,000

Retained earnings 1,574,000 1,222,000 750,000

The 2016 net income was $372,000,

and the 2015 net income was $492,000. No dividends on common stock were declared between 2014 and 2016

. a. Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2015 and 2016. Round to one decimal place. 2016 2015 Rate earned on total assets % % Rate earned on stockholders' equity % % Rate earned on common stockholders' equity % % b. The profitability ratios indicate that Robinson Inc.'s profitability has . Because the rate of return on common stockholders' equity the rate earned on total assets in both years, there is leverage from the use of debt.