Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:

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 Notes payable (8% interest) Common stock Preferred 6% stock, $100 par $182,000 60,000 24,000 12,000 $164,000 60,000 24,000 12,000 $146,000 60,000 24,000 12,000 (no change during year) Retained earnings 69,200 44,780 36,000 The 20Y7 net income was $25,140, and the 20Y6 net income was $9,500. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. a. Determine the return on total assets, the rate earned 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 Return on stockholders' equity Return on common stockholders' equity b. The profitability ratios indicate that Vidahill Inc. 's profitability has . Since the rate of return on assets is the return on stockholders' equity in both years, there must be leverage from the use of debt