Given the following information for Victory Stables, calculate their return on assets, return on equity and comment on the use of these ratios (why would we use them, what do they tell us).

Net income $50,000

Interest expense 8,500

Income tax expense 15,250

Preferred dividends 2,500

Beginning of the Year < > End of the Year Current

assets $62,000 $82,000

Current liabilities 25,000 55,000

Plant and equipment 300,000 350,000

Long-term liabilities 50,000 75,000

Common shareholders equity 125,000 225,000

Preferred shareholders equity 60,000 85,000