Exercise 16-11 (Algo) Financial Ratios for Assessing Profitability and Managing Debt [LO16-4, LO16-5] Selected financial...
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Exercise 16-11 (Algo) Financial Ratios for Assessing Profitability and Managing Debt [LO16-4, LO16-5] Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets at the beginning of the year were $5,500,000; total stockholders' equity was $2,800,000. The company's tax rate is 35%. 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
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