The following are extracted from the financial statements of Frem, Inc., for 2012, 2011, and 2010.

	2012	2011	2010
Net sales	$233,000	$204,000
Cost of sales	(124,000)	(110,000)
Selling and administrative expenses	(95,000)	(81,500)
Other income:
Interest	(3,700)	(3,050)
Other	100	1,175
Earnings before tax and extraordinary credit	$ 10,400	$ 10,625
Provision for income tax	(4,800)	(4,740)
Earnings before extraordinary credit	5,600	5,885
Extraordinary credit	-	1,510
	$ 5,600	$ 7,395
Total assets	$202,000	$173,000	$161,000
Long-term debt	24,600	17,400	15,200
Common equity	123,000	116,800	112,800
Preferred stock	4,000	4,000	4,000
Preferred dividends	280	280	280

Required:

a.	Compute the following ratios for 2012 and 2011.
	1.	Net profit margin
	2.	Total asset turnover
	3.	Return on assets
	4.	Return on investment
	5.	Return on total equity
	6.	Return on common equity
	7.	Gross profit margin
b.	Discuss the trend in profitability and identify specific causes for the trend.