1. Use the following financial statements to answer this question Green Shield Corporation Income statements For years ended December 31, Year 5, and Year 6 (s thousands) Year 5 Year 6 Sales $818,149 $891,127 COGS and operating expenses 736,646.5 799,339.5 Interest expense 10,912.5 10,421.5 Pretax profit 70,590 81,366 Net income 44.471.5 52.074 Green Shield Corporation Balance Sheets At December 31, Year 5 and Year 6 (Sthousands) Year 5 Year 6 ASSETS I Cash 1 $57,698.5| Marketable securities 19,004 Accounts receivables, net 1 8 8,769 Inventories 102.181 | TOTAL CURRENT ASSETS 1 2 67,652.5 Marketable securities 19,829.5 Property, plant, and equipment, 769,610.5 net Goodwill 3.275 TOTAL LONG-TERM ASSETS 792.715 TOTAL ASSETS $1.060.367.5 $35,773 21,927 91,429.5 128419 277,548.5 59,693.5 816,729 3.275 879.697.5 $1.157.246 $3,925 69,331 12,185 15.220 $6,867 77,741 6,628 16,91 LIABILITIES Notes payable Accounts payable Taxes payable Current maturities of long-term debt TOTAL CURRENT LIABILITIES LONG-TERM DEBT Pension liabilities TOTAL LONG-TERM LIABILITIES 1600.661| 253.664.51 371.889.5 108.147 236.753.5 426.118.5 662.872 EQUITY Common stock Additional paid in capital 1 206,891.5 206,891.5 .6041 9 Retained earnings Treasury stock TOTAL STOCKHOLDERS' EQUITY 218,376 (100719 334.152.5 270,450.5 (100.719) 386.227 TOTAL LIABILITIES AND EQUITY $1.060.367.5 $1.157.246 REQUIRED a) Calculate RNOA b) Calculate RNOA by disaggregating it to its different components c) Evaluate the effect of financial leverage on ROE, is the company taking advantage of debt at its current level or not? Support you answer with detailed calculations as well as explanation. Question number Marks allocated 20 15 15 15 15 20