Financial Statements for Sarosa Company Appear Below Required:
A)Calculate Sarosa Company's Return on Total Assets for Year

Financial statements for Sarosa Company appear below:

$\begin{array}{|l|r|}\hline &\begin{array}{r}\text { Sarosa Company } \\\text { Income Statement } \\\text { For the Year Ended December 31, Year 2} \\\text { (dollars in thousands) }\end{array}\\\hline \text { Sales (All on Account) } & \$ 1870 \\\hline \text { Costs of Goods Sold } & \$ 1300 \\\hline \text { Gross Margin } & \$ 570 \\\hline \text { Operating Expenses } & \$ 220 \\\hline \text { Net Operating Income } & \$ 350 \\\hline \text { Interest Expense } & \$ 40 \\\hline \text { Net Income before Taxes } & \$ 310 \\\hline \text { Income Taxes (30\%) } & \$ 93 \\\hline \text { Net Income } & \$ 217\\\hline\end{array}$
Required:
a)Calculate Sarosa Company's return on total assets for Year 2.
b)Calculate Sarosa Company's return on common shareholders' equity for Year 2.
c)Financial leverage was positive for Year 2.Why?
d)Assume all current liabilities are interest free and that the interest expense of $40 is for the bonds payable.
(i)Calculate the dollar amount of the financial leverage (in $1,000)
(ii)Allocate the dollar amount of the financial leverage to the following sources of financing:Preferred Shares,Bonds Payable,and Current Liabilities (rounded to the nearest $1,000)