The following selected data were taken from the financial statements of The OMalley Group Inc. for December

The following selected data were taken from the financial statements of The O’Malley Group Inc. for December 31, 2012, 2011, and 2010:

The 2012 net income was $430,000, and the 2011 net income was $320,000. No dividends on common stock were declared between 2010 and 2012.

a. Determine the rate earned on total assets, the rate earned on stockholders’ equity, and the rate earned on common stockholders’ equity for the years 2011 and 2012. Round to one decimal place.
b. What conclusions can be drawn from these data as to the company’sprofitability?

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December 31 2012 2011 2010 $2,700,000 750,000 250,000 $2,300,000 $2,000,000 Total assets Notes payable (8% interest) Common stock Preferred $5 stock, $100 par 750,000 250,000 750,000 250,000 (no change during year) Retained earnings 400,000 1,300,000 400,000 900,000 400,000 600,000