The following Information is for A. Galler Company for 2011, 2010 and 2009:

2011 2010 2009

Income before interest 4,400,000 4,000,000 3,300,000

Interest expense 800,000 600,000 550,000

Income before tax 3,600,000 3,400,000 2,750,000

Tax 1,500,000 1,450,000 1,050,000

Net Income 2,100,000 1,950,000 1,700,000

2011 2010 2009

Current Liabilities 2,600,000 2,300,000 2,200,000

Long-Term Debt 7,000,000 6,200,000 5,800,000

Preferred stock (14%) 100,000 100,000 100,000

Common Equity 10,000,000 9,000,000 8,300,000

Required:

a. for 2011,2010 and 2009 determine the following:

1. Return on assets(using end-of-year total assets)

2. Return on investment (Using end-of-year long-term liabilities and equity)

3. Return on Total equity (using ending total equity)

4. Return on common equity (using ending common equity)

b. discuss the trend in these profit figures

c. discuss the benefit from the use of long-term debt and preferred stock