Recent financial statements for Madison Company follow:

Madison Company Balance Sheet June 30
Assets
Current assets:
Cash				$	21,000
Accounts receivable, net					170,000
Merchandise inventory					320,000
Prepaid expenses					10,000
Total current assets					521,000
Plant and equipment, net					910,000
Total assets				$	1,431,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	240,000
Bonds payable, 10%					360,000
Total liabilities					600,000
Stockholders equity:
Common stock, $10 par value	$	160,000
Retained earnings		671,000
Total stockholders equity					831,000
Total liabilities and stockholders' equity				$	1,431,000

Madison Company Income Statement For the Year Ended June 30
Sales	$	2,190,000
Cost of goods sold		1,230,000
Gross margin		960,000
Selling and administrative expenses		650,000
Net operating income		310,000
Interest expense		36,000
Net income before taxes		274,000
Income taxes		82,200
Net income	$	191,800

Account balances at the beginning of the companys fiscal year were: accounts receivable, $160,000; and inventory, $360,000. All sales were on account. Assets at the beginning of the year totaled $1,040,000, and the stockholders equity totaled $715,000.

Required:

Compute the following:

1.	Return on total assets. (Round your answer to 1 decimal place.)

Return on total assets

%

2.	Return on common stockholders equity. (Round your answer to 1 decimal place.)

Return on common stockholders equity

%

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