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7. (20 pts) As you can determine from the attached financial statements (balances are at year end), the return on equity (ROE) declined significantly from 2013 to 2015. Decompose ROE into the five component ratios (for each year) and offer a thoughtful explanation for the decline. (When calculating ratios that use balance sheet items, please use the year-end numbers. Do not use averages. For example, when calculating a ratio that uses total assets, use the balance sheet number provided for that year. Do not use the average [(beginning + end)/2] 2013 2014 2015 Revenue Cost of goods Sold Selling, Gen. Admin expenses Depreciation Operating Income Interest Earnings before Tax Taxes Net Income 7760 6050 8123 6579 4170 590 50 590 28 562 174 388 931 50 729 49 680 211 469 1123 75 346 56 290 90 200 Cash Accts. Receivable Inventory Net Property, Plant & 50 720 430 60 730 590 30 690 600 3060 4440 ul 2500 3320 Total Assets 3700 Current Liabilities Long Term Debt Total Liabilities Stock equit Total Liabilities and equity 1110 400 1510 2190 3700 1550 700 2250 2190 4440 1650 800 2450 2190