Profitability ratios

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

Line Item Description	December 31 20Y7	December 31 20Y6	December 31 20Y5
Total assets	$4,800,000	$4,400,000	$4,000,000
Notes payable (8% interest)	2,250,000	2,250,000	2,250,000
Common stock	250,000	250,000	250,000
Preferred 4% stock, $100 par (no change during year)	500,000	500,000	500,000
Retained earnings	1,574,000	1,222,000	750,000

The 20Y7 net income was $372,000, and the 20Y6 net income was $492,000. 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 return on stockholders' equity, and the return on common stockholders equity for the years 20Y6 and 20Y7. Round your answers to one decimal place.

Line Item Description	20Y7	20Y6
Return on total assets	fill in the blank 1 %	fill in the blank 2 %
Return on stockholders' equity	fill in the blank 3 %	fill in the blank 4 %
Return on common stockholders equity	fill in the blank 5 %	fill in the blank 6 %

b. The profitability ratios indicate that the company's profitability has fill in the blank 1 of 3

improve or deteriorated

. Because the return on common stockholders' equity fill in the blank 2 of 3

exceeds or does not exceed

the return on total assets in both years, there is fill in the blank 3 of 3

positive or enegative

leverage from the use of debt.