Please answer b. What conclusions can be drawn from these data as to the companys profitability?

The following selected data were taken from the financial statements of The O'Malley Group Inc. for December 31, 2045, 2014, and 20Y3: December 31 2045 2014 20Y3 Total assets $2,900,000 $2,400,000 $2,000,000 Notes payable (5% interest) 800,000 800,000 800,000 Common stock 250,000 250,000 250,000 Preferred $4 stock, $50 par (no change during year) 400,000 400,000 400,000 Retained earnings 1,450,000 950,000 550,000 Net income 530,000 430,000 330,000 No dividends on common stock were declared between 20Y3 and 2015. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 2014 and 20Y5. Round to one decimal place. 2015 2014 Rate earned on total assets 21.5 % 21.36 % Rate earned on stockholders' equity 28.64 % 30.71 % Rate earned on common stockholders' equity 34.34 % 39.8 % b. What conclusions can be drawn from these data as to the company's profitability? Since the rate of return on assets exceeds the cost of debt in both years, there is positive leverage from the use of debt. Since the rate of return on assets is less than the cost of debt in both years, there is positive leverage from the use of debt. Since the rate of return on equity is less than the cost of debt in both years, there is positive leverage from the use of debt. Since the rate of return on assets is less than the debt equity ratio in both years, there is positive leverage from the use of debt.