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The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $322,000 $290,000 $258,000 Notes payable (8% interest) 110,000 110,000 110,000 Common stock 44,000 44,000 44,000 Preferred 5% stock, $100 par 22,000 22,000 22,000 (no change during year) Retained earnings 121,220 81,300 66,000 The 2017 net income was $41,020, and the 20Y6 net income was $16,400. No dividends on common stock were declared between 2015 and 20Y7. Preferred dividends were declared and paid in full in 2016 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 2016 and 20Y7. Round percentages to one decimal place. Return on total assets Return on stockholders' equity Return on common stockholders' equity 20Y7 20Y6 % % % % % % b. The profitability ratios indicate that the company's profitability has improved less than the return on stockholders' equity in both years, there must be positive . Since the rate of return on total assets is leverage from the use of debt.
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