Exercise 15-11 Financial Ratios for Assessing Profitability and Managing Debt (LO15-4, LO15-5) Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets Long-term debt (11% interest rate) Total stockholders' equity Interest paid on long-term debt Net income $5,600,000 $ 700,000 $2,700,000 $ 77,000 $ 430,000 Total assets at the beginning of the year were $5,400,000; total stockholders' equity was $2,500,000. The company's tax rate is 40% Required: 1. Compute the return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 2. Compute the return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Is financial leverage positive or negative? % 1. Return on total assets % 2. Return on equity 3. Financial Leverage