Selected financial data from the June 30 year-end statements of Safford Company are given below:

Total assets	$ 5,100,000
Long-term debt (12% interest rate)	$ 740,000
Total stockholders equity	$ 2,400,000
Interest paid on long-term debt	$ 88,800
Net income	$ 420,000

Total assets at the beginning of the year were $4,900,000; total stockholders equity was $2,200,000. The companys tax rate is 35%.

Required:

1. Compute the return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

2. Compute the return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

3. Is financial leverage positive or negative?