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

Total assets	$	5,200,000
Long-term debt (11% interest rate)		$680,000
Total stockholders equity	$	2,200,000
Interest paid on long-term debt		$74,800
Net income		$390,000

Total assets at the beginning of the year were $5,000,000; total stockholders equity was $2,000,000. The companys tax rate is 30%.

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?

	Positive
	Negative