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Assignment ebook Show Me How Print Item Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $216,000 $195,000 $174,000 Notes payable (8% interest) 70,000 70,000 70,000 Common stock 28,000 28,000 28,000 Preferred 3% stock, $100 par 14,000 14,000 14,000 (no change during year) Retained earnings 83,815 60,410 42,000 The 20Y7 net income was $23,825, and the 20Y6 net income was $18,830. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. When required, round to one decimal place. 20Y7 20Y6 Return on total assets 14.3 % 13.2 Return on stockholders' equity 20.9 o/ 20.2 o/ Return on common stockholders' equity b. The profitability ratios indicate that the company's profitability has improved V . Since the return on assets is less than V the return on stockholders' equity in both years, there must be positive leverage from the use of debt. Feedback Check My WorkeBook Show Me How Print Item Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $216,000 $195,000 $174,000 Notes payable (8% Interest) 70,000 70,000 70,000 Common stock 28,000 28,000 28,000 Preferred 3% stock, $100 par 14,000 14,000 14,000 (no change during year) Retained earnings 83,815 60,410 42,000 The 20Y7 net Income was $23,825, and the 2016 net income was $18,830. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full In 2016 and 2017. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 2016 and 20Y7. When required, round to one decimal place. 20Y7 20Y6 Return on total assets 14.3 % 13.2 Return on stockholders' equity 20.9 20.2 % Return on common stockholders' equity b. The profitability ratios Indicate that the company's profitability has improved V . Since the return on assets is less than the return on stockholders' equity in both years, there must be positive V leverage from the use of debt