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The financial statements for Castile Products, Incorporated are given below: Castile Products, Incorporated Balance Sheet Assets Current assets: Cash December 31 $ 18,000 Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $5 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Castile Products, Incorporated Income Statement 190,000 390,000 6,000 604,000 840,000 $ 1,444,000 $ 210,000 300,000 510,000 $ 100,000 834,000 934,000 $ 1,444,000 Sales For the Year Ended December 31 Cost of goods sold Gross margin Selling and administrative expenses. Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $ 2,290,000 1,220,000 1,070,000 600,000 470,000 30,000 440,000 132,000 $ 308,000 Sales Castile Products, Incorporated Income Statement For the Year Ended December 31 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes: Income taxes (30%) Net income $ 2,290,000 1,220,000 1,070,000 600,000 470,000 30,000 440,000 132,000 $ 308,000 Account balances at the beginning of the year were: accounts receivable, $150,000; and inventory, $300,000. All sales were on account. Assets at the beginning of the year totaled $1,060,000, and the stockholders' equity totaled $685,000. Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity 5. Financial Leverage % % % %

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