Afinancial analyst for Quality Investments Pty Ltd, a diversified investment fund, has gathered the following information ($ millions) for the years 2018 and 2019 on two companies, A and B, that it is considering adding to its portfolio.(TABLE PICTURE IS ATTACHED WITH THIS QUES)

** I HAVE ATTACHED THE PICTURE OF TABLE WITH THIS QUESTION **

a)Use the data from the above table to assess the operating leverage of each company (use 2018 as the point of reference). Which company has more operating leverage?

b)Assess the ROE(cash to equity/ordinary shares equity) of the two companies assuming the company's Return onAssetsis 10% and 20%.

c)Which company has more financial leverage?

2018 2019 Item Company A Company B Company A |Company B Sales 10.8 14 12.2 14.6 EBIT 5.2 7.6 7.2 8.4 Assets 10.8 16.2 Debt 5.6 8.4 Ineterest 0.8 1.2 Equity 4.8 6.4