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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 $170,000 $153,000 $136,000 Notes payable (8% interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 6% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 71,690 50,955 36,000 The 2017 net income was $21,455, and the 20Y6 net income was $15,675. No dividends on common stock were declared between 2005 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 20Y6 and 20Y7. When required, round 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 the return on stockholders' equity in both years, there must be Since the return on assets is leverage from the use of debt.
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