Income statements for The Gap, Inc., follow, along with selected balance sheet information ($ millions).

a. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for the fiscal year ended February 3, 2018. Assume an incremental tax rate of 35%.

b. Disaggregate ROA into profit margin (PM) and asset turnover (AT).

c. Compute the gross profit margin (GPM) and inventory turnover (INVT) ratios for the fiscal year ended February 3, 2018.

d. Assess the Gap's performance. What are the most important drivers of the Gap's success?

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THE GAP, INC. Consolidated Statement of Earnings Fiscal year ended Feb. 3, 2018 Jan. 28, 2017 Not sales...... Cost of goods sold and occupancy expenses $15,855 $15,516 ... 9,789 9,876 Gross profit... Operating expenses. 6,066 4,587 5,640 4,449 Operating income. Interest expense. Interest income.. 1,479 1,191 74 75 (19) (8) Income before income taxes 1,424 1,124 Incorne taxes... 576 448 Net income. 848 $ 676 THE GAP, INC. Selected Balance Sheet Data Feb. 3, 2018 Jan. 28, 2017 Merchandise inventories... $1,997 $1,830 ... Total assets 7,989 7,610 Total stockholders' equity 3,144 2,904 ...