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The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 2017, 2016, and 20Y5: December 31 2016 2015 2017
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 2017, 2016, and 20Y5: December 31 2016 2015 2017 $319,000 $255,000 Total assets Notes payable (8% interest) 110,000 110,000 44,000 $287,000 110,000 44,000 22,000 44,000 22,000 22,000 Common stock Preferred 3% stock, $100 par (no change during year) Retained earnings 134,840 94,990 66,000 The 2017 net income was $40,510, and the 2016 net income was $29,650. No dividends on common stock were declared between 2045 and 2047. Preferred dividends were declared and paid in full in 2016 and 2017. a. Determine the return on total assets, the rate earned on stockholders' equity, and the return on common stockholders' equity for the years 2016 and 20Y7. When required, round to one decimal place. 2017 2016 Return on total assets Return on stockholders' equity Return on common stockholders' equity the return b. The profitability ratios indicate that Vidahill Inc.'s profitability has improved Since the rate of return on assets is less than on stockholders' equity in both years, there must be positive leverage from the use of debt
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