Question 3 Sandhill Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow. Sandhill Medical Comparative Balance Sheet As of December 31 2016 2015 Assets Current assets Cash Accounts receivable, net Inventory Other current assets $305,000 1,065,100 745,000 335,000 2,450,100 9,495,025 $11,945,125 $417,500 776,400 681,050 247,000 2,121,950 8,381,715 Total current assets Property, plant, & equipment, net Total assets $10,503,665 Liabilities and Stockholders' Equity Current liabilities Long-term debt $2,846,000 3,892,600 6,738,600 Total liabilities Preferred stock, $5 par value Common stock, $0.25 par value Retained earnings Total stockholders' equity $3,164,000 3,702,650 6,866,650 55,100 134,000 4,889,375 5,078,475 $11,945,125 55,100 103,800 3,606,165 3,765,065 $10,503,665 Total liabilities and stockholders' equity Sandhill Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2016 2015 Sales revenue (all on account) Cost of goods sold Gross profit Operating expenses Net operating income $10,510,000 4,898,000 5,612,000 2,840,200 2,771,800 305,000 2,466,800 740,040 $1,726,760 $9,613,950 5,298,750 4,315,200 2,634,100 1,681,100 308,650 1,372,450 411,735 $960,715 Interest expense Net income before taxes Income taxes (30%) Net income Dividends paid Preferred dividends Common dividends Total dividends paid Net income retained Retained earnings, beginning of year Retained earnings, end of year 29,550 414,000 443,550 1,283,210 3,606,165 $4,889,375 29,550 425,000 454,550 506,165 3,100,000 $3,606,165 Calculate the following profitability ratios for 2016. (Round answers to 1 decimal place, e.g. 50.1%.) a. Gross margin percentage % b. Return on assets % c. Return on common stockholders' equity % Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO VIDEO