Profitability Ratios

East Point Retail, Inc. sells apparel through company$-$owned retail stores. Recent financial information for East Point follows $($in thousands$)$:

Fiscal Year $3$ Fiscal Year $2$

Net income $($loss$)$ $$137,600$ $$(70,800)$

Interest expense $2,80010,600$

Fiscal Year $3$ Fiscal Year $2$ Fiscal Year $1$

Total assets $($at end of fiscal year$)$ $$1,564,239$ $$1,487,935$ $$1,318,961$

Total stockholders' equity $($at end of fiscal year$)1,060,8861,039,878752,528$

Assume the apparel industry average return on total assets is $5\mathrm{.}0\%$ and the average return on stockholders' equity is $8\mathrm{.}0\%$ for the year ended February $2,$ Year $3.$

a$.$ Determine the return on total assets for East Point for fiscal Years $2$ and $3.$ Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on total assets.

Fiscal Year $3$ fill in the blank $1$

$\%$

Fiscal Year $2$ fill in the blank $2$

$\%$

b$.$ Determine the return on stockholders$$ equity for East Point for fiscal Years $2$ and $3.$ Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on stockholders' equity.

Fiscal Year $3$ fill in the blank $3$

$\%$

Fiscal Year $2$ fill in the blank $4$

$\%$

c$.$ In Fiscal Year $3,$ the return on stockholders' equity is

the return on total assets due to the

use of leverage.