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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 $31$

$20$Y$720$Y$620$Y$5$

Total assets $$255,000$ $$230,000$ $$205,000$

Notes payable $(8\%$ interest$)90,00090,00090,000$

Common stock $36,00036,00036,000$

Preferred $4\%$ stock, $$100$ par $18,00018,00018,000$

$($no change during year$)$

Retained earnings $106,48572,55554,000$

The $20$Y$7$ net income was $$34,650,$ and the $20$Y$6$ net income was $$19,275.$ No dividends on common stock were declared between $20$Y$5$ and $20$Y$7.$ Preferred dividends were declared and paid in full in $20$Y$6$ and $20$Y$7.$

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 $20$Y$7.$ When required, round your answers to one decimal place.

$20$Y$720$Y$6$

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

$.$ Since the return on assets is

the return on stockholders' equity in both years, there must be

leverage from the use of debt.