The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 9% Total liabilities Stockholders' equity: Common stock, $5 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 22,000 240,000 310,000 8,000 580,000 870,000 $1,450,000 $ 220,000 390,000 610,000 $ 110,000 730,000 840,000 $1,450,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $2,210,000 Cost of goods sold 1,200,000 Gross margin 1,010,000 Selling and administrative expenses 590,000 Net operating income 420,000 Interest expense 35, 100 Net income before taxes 384,900 Income taxes (30%) 115,470 Net income $ 269, 430 Account balances at the beginning of the year were: accounts receivable, $240,000; and inventory, $330,000. All sales were on account. Assets at the beginning of the year totaled $1,060,000, and the stockholders' equity totaled $725,000. Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? % 1. Gross margin percentage 2. Net profit margin percentage % 3. Return on total assets % 4. % Return on equity Financial Leverage 5