Return Ratios and Leverage The following selected data are taken from the financial statements of Pine Corp.: Sales revenue Cost of goods sold Gross profit Selling and administrative expense Operating income Interest expense $644,000 381,000 $263,000 $ 100,000 $163,000 50,000 Income before tax $113,000 45,200 Income tax expense (40%) Net income $67,800 $45,000 70,000 10,000 Accounts payable Accrued liabilities Income taxes payable Interest payable Short-term loans payable Total current liabilities 25,000 150,000 $300,000 Long-term bonds payable Preferred stock, 10%, $100 par $500,000 $250,000 600,000 Common stock, no par 350,000 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $1,200,000 $2,000,000 Required: 1. Compute the following ratios for Pine Corp.: a. Return on sales b. Asset turnover (Assume that total assets at the beginning of the year were $1,600,000.) C. Return on assets d. Return on common stockholders' equity (Assume that the only changes in stockholders' equity during the year were from the net income for the year and dividends on the preferred stock.) When computing percentage amounts, carry out calculations to four decimal places, but enter your answers to two decimal places; for example, .17856 rounds to .1786 and would be entered as 17.86. a. Return on sales % b. Asset turnover (round to 2 decimal places) times c. Return an assets % d. Return on common stockholders' equity 2. Comment on Evergreen's use of leverage. Has it successfully employed leverage? No, Evergreen has not successfully employed leverage because; the return on the stockholders funds is less than the return to all the providers of capital