Profitability Ratios

East Point Retail, Inc., sells professional women's apparel through company$-$owned retail stores. Recent financial information for East Point is provided below $($all numbers in thousands$).$

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

a$.$ Determine the rate earned on total assets for East Point for fiscal Years $2$ and $3.$ Round to one decimal place.

Fiscal Year $3$

$\%$

Fiscal Year $2$

$\%$

b$.$ Determine the rate earned on stockholders' equity for East Point for fiscal Years $2$ and $3.$ Round to one decimal place.

Fiscal Year $3$

$\%$

Fiscal Year $2$

$\%$

c$.$ The rate earned on stockholders' equity is $.$

the rate earned on total assets due to the

use of leverage.

d$.$ During fiscal Year $3,$ East Point's results were

compared to the industry average. These relationships suggest that East Point has