Grundig Technologies is a manufacturer. Below are the company's two most recent balance sheets and its most recent income statement. Use this information to answer the following questions:
a. Calculate the rate of return on assets (ROA) for 2011. Disaggregate ROA into the profit margin for ROA and total assets turnover components.
b. Calculate the rate of return on common stockholders’ equity (ROCE) for 2011. Disaggregate ROCE into the profit margin for ROCE, total assets turnover and capital structure leverage components.
c. Did financial leverage work to the advantage of the common shareholders during 2011? Explain.

Correct Answer:
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