Answer Happy

Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets Long-term debt (12% interest rate) Total stockholders' equity $ 5,100,000 $ 600,000 $3,000,000 $ 72,000 $ 420,000 Interest paid on long-term debt Net income Total assets at the beginning of the year were $4,900,000; total stockholders' equity was $2,800,000. The company's tax rate is 30% Required: 1. Compute the return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 2. Compute the return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Is financial leverage positive or negative? 1. Return on total assets 2. Return on equity 3. Financial Leverage