StPetersburg Corporation
Use the Information Obtained from the Comparative Financial

St.Petersburg Corporation
Use the information obtained from the comparative financial statements included in the St.Petersburg Corporation's 2018 annual report that is presented below to answer the questions that follow.All amounts are in thousands of dollars.
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$\begin{array}{lrr}&\text { Dec. 31, } 2018&\text { Dec. 31, } 2017\\\text { Total assets } & \$ 800,000 & \$ 975,000 \\\text { Total common stockholders' equity } & 405,000 & 578,000 \\\text { Total stockholders' equity } & 504,000 & 702,000\\\\\\&\text { December } 31\\\text { FOR THE FISCAL YEARS ENDED }&2018&2017\\\hline\text { Interest expense, net of tax } & 5,000 & \$, 700 \\\text { Interest expense } & 6,100 & 5,800 \\\text { Income tax expense } & 22,600 & 32,600 \\\text { Net income } & 110,000 & 27,000 \\\text { Common dividends } & 12,600 & 7,200 \\\text { Net sales } & 2,667,600 & 1,971,000 \\\text { Preferred dividends } & 9,000 & 14,400\end{array}$ ​
-Refer to the financial information for St.Petersburg Corporation.
Required
(A)Identify the two components of the return on assets ratio for St.Petersburg.Explain the change in the return on assets ratio during 2018 as it relates to these components.
(B)During 2018,how much is St.Petersburg's average cost of borrowed capital as compared to the cost of the money provided by the preferred stockholders? Which is the more profitable? Explain.