The financial statements for Castile Products, Inc., are given below:

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash				$	21,000
Accounts receivable, net					220,000
Merchandise inventory					350,000
Prepaid expenses					9,000
Total current assets					600,000
Property and equipment, net					850,000
Total assets				$	1,450,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	220,000
Bonds payable, 10%					400,000
Total liabilities					620,000
Stockholders' equity:
Common stock, $5 par value				$	150,000
Retained earnings					680,000
Total stockholders' equity					830,000
Total liabilities and stockholders' equity				$	1,450,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,290,000
Cost of goods sold		1,190,000
Gross margin		1,100,000
Selling and administrative expenses		600,000
Net operating income		500,000
Interest expense		40,000
Net income before taxes		460,000
Income taxes (30%)		138,000
Net income	$	322,000

Account balances at the beginning of the year were: accounts receivable, $160,000; and inventory, $330,000. All sales were on account. Assets at the beginning of the year totaled $1,050,000, and the stockholders' equity totaled $675,000.

Required:

Compute the following:

1.	Gross margin percentage. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

48.03%

2.	Net profit margin percentage. (Round your answer to the nearest whole percentage place (i.e., 0.1234 should be entered as 12%).)

14.06%

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

0.4% is this correct?

4.	Return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

42.8%

5.

Was financial leverage positive or negative for the year?

positive	Positive
	Negative