The Following Selected Data Were Taken from the Financial Statements

Essay

The following selected data were taken from the financial statements of the Winter Group for the three most recent years of operations: $\begin{array}{|l|r|r|r|}\hline& \begin{array}{c}\text { Dec. 31, } \\\text { Year 3 }\end{array} & \begin{array}{c}\text { Dec. 31, } \\\text { Year 2 }\end{array} & \begin{array}{c}\text { Dec. 31, } \\\text { Year 1 }\end{array} \\\hline \text { Total assets } & \$ 3,000,000 & \$ 2,700,000 & \$ 2,400,000 \\\hline \text { Notes payable }(10 \% \text { interest) } & 1,000,000 & 1,000,000 & 1,000,000 \\\hline \text { Common stock } & 400,000 & 400,000 & 400,000 \\\hline \text { Preferred } \$ 6 \text { stock } \$ 100 \text { par } & 200,000 & 200,000 & 200,000 \\\hline \text { Retained earnings } & 1,126,000 & 896,000 & 600,000 \\\hline\end{array}$ ​
The Year 3 net income was $242,000 and the Year 2 net income was $308,000. No dividends on common stock were declared during the 3 years.
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(a) Determine the return on total assets, the return on stockholders' equity, and the return on
common stockholders' equity for Years 2 and 3. Round to one decimal place.
(b) What conclusion can be drawn from these data as to the company's profitability?