Recent financial statements for Madison Company follow:

Account balances at the beginning of the companys fiscal year were: accounts receivable, $140,000; and inventory, $360,000. All sales were on account. Assets at the beginning of the year totaled $1,020,000, and the stockholders equity totaled $685,000.

1.

Return on total assets. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

2.

Return on common stockholders equity. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

3.	Was financial leverage positive or negative for the year?

Madison Company Balance Sheet June 30 Assets Current assets: Cash Accounts receivable, net Merchandise inventony Prepaid expenses $ 20,000 190,000 320,000 8,000 Total current assets Plant and equipment, net 538,000 870,000 Total assets $1,408,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 8% 300,000 380,000 Total liabilities Stockholders' equity: 680,000 Common stock, $10 par value Retained earnings $180,000 548,000 Total stockholders' equity 728,000 Total liabilities and stockholders' equity $1,408,000 Madison Company Income Statement For the Year Ended June 30 Sales Cost of goods sold $2,210,000 1,210,000 Gross margin Selling and administrative expenses 1,000,000 650,000 Net operating income Interest expense 350,000 30,400 Net income before taxes Income taxes 319,600 95,880 Net income $ 223,720