Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets $ 5,700,000 Long-term debt (9% interest rate) $710,000 Total stockholders equity $ 2,900,000 Interest paid on long-term debt $63,900 Net income $440,000 Total assets at the beginning of the year were $5,500,000; total stockholders equity was $2,700,000. 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).)

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

return on equity:____________% 3. Is financial leverage positive or negative? _ Positive _ Negative