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The folliowing selected data were taken from the financial statements of the Winter Group for the three most recent years of operations Dec. 31, Year

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The folliowing selected data were taken from the financial statements of the Winter Group for the three most recent years of operations Dec. 31, Year 3 Dec. 31, Year 2 Dec. 31, Year 1 Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained eamings 3,000,000 $2,700,000 2,400,000 1,000,000 400,000 200,000 600,000 1,000,000 400,000 200,000 1,126,000 1,000,000 400,000 200,000 896,000 The Year 3 net income was $242,000 and the Year 2 net income was $308,000. No dividends on common stock Required: a. Determine the return on total assets, the were declared during the 3 years return on stockholders equity, and the retum on common stockholders' equity for Years 2 and 3. If required, round your answers to one decimal Year 3 Year 2 Return on Total Assets Return on Stockholders Equity Return on Common Stockholders Equity b. What conclusion can be drawn from these data as to the company's profitability? The profitability ratios indicate that The Winter Group's profitability has leverage from use of debt. Most of this change is from net income Y in Year 3. There is The folliowing selected data were taken from the financial statements of the Winter Group for the three most recent years of operations Dec. 31, Year 3 Dec. 31, Year 2 Dec. 31, Year 1 Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained eamings 3,000,000 $2,700,000 2,400,000 1,000,000 400,000 200,000 600,000 1,000,000 400,000 200,000 1,126,000 1,000,000 400,000 200,000 896,000 The Year 3 net income was $242,000 and the Year 2 net income was $308,000. No dividends on common stock Required: a. Determine the return on total assets, the were declared during the 3 years return on stockholders equity, and the retum on common stockholders' equity for Years 2 and 3. If required, round your answers to one decimal Year 3 Year 2 Return on Total Assets Return on Stockholders Equity Return on Common Stockholders Equity b. What conclusion can be drawn from these data as to the company's profitability? The profitability ratios indicate that The Winter Group's profitability has leverage from use of debt. Most of this change is from net income Y in Year 3. There is

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