Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20 Y7 20 Y6 20 Y5 Total assets: $248,000 $223,000 $198,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 4% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 80,030 60,410 48,000 20 Y7 20 Y6 Return on total assets %6% Return on stockholders' equity %6 % Return on common stockholders' equity % % b. The profitability ratios indicate that the company's profitability has . Since the rate of return on assets is the return on stockholders' equity in both vears, there must be leverage from the use
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