Profitability Ratios

The following selected data were taken from the financial statements of Vidahill Inc. for December $31,20$Y$7,20$Y$6,$ and $20$Y$5$:

December $31$

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 $20$Y$6$ and $20Y7.$ Round percentages

to one decimal place.

b$.$ The profitability ratios indicate that the company's profitability has improved $.$ Since the rate of return on total assets is less than $$ the return on

stockholders' equity in both years, there must be positive $$ leverage from the use of debt.