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

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash				$	20,000
Accounts receivable, net					250,000
Merchandise inventory					320,000
Prepaid expenses					8,000
Total current assets					598,000
Property and equipment, net					820,000
Total assets				$	1,418,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	230,000
Bonds payable, 9%					310,000
Total liabilities					540,000
Stockholders equity:
Common stock, $10 par value				$	120,000
Retained earnings					758,000
Total stockholders equity					878,000
Total liabilities and stockholders' equity				$	1,418,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,160,000
Cost of goods sold		1,170,000
Gross margin		990,000
Selling and administrative expenses		610,000
Net operating income		380,000
Interest expense		27,900
Net income before taxes		352,100
Income taxes (30%)		105,630
Net income	$	246,470

Account balances at the beginning of the year were: accounts receivable, $150,000; and inventory, $270,000. All sales were on account. Assets at the beginning of the year totaled $1,000,000, and the stockholders equity totaled $645,000.

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).)

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

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

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

5.

Was financial leverage positive or negative for the year?

	Positive
	Negative