Lofty Exploration Company reported these figures for 2012 and 2011:

Requirements
1. Compute rate of return on total assets and rate of return on common stockholders€™ equity for 2012.
2. Do these rates of return suggest strength or weakness? Give yourreason.

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2012 2011 Income Statement-partial: Interest expense 12,400,000 17,400,000 Net Income 17,900,000 19,100,000 2012 2011 Balance Sheet-partial: $ 328,000,000 $ 318,000,000 Total assets Preferred stock, $2, no-par, 150,000 shares authorized, issued and outstanding Common stockholders' equity Retained carnings Total stockholders' cquity $ 2,400,000 2,400,000 171,000,000 178,000,000 4,000,000 $ 184,400,000 3,000,000 $ 176,400,000