Below is the financial information for Procter & Gamble Co. and Johnson & Johnson for the fiscal year 2022:

($ millions)	Procter & Gamble Co.	Johnson & Johnson
Net sales	$82,034	$101,239
Cost of sales	41,805	37,921
Gross profit	40,229	63,318
Operating expenses:
Selling, general, and administrative (SG&A)	15,824	24,684
Research and development (R&D)	4,898	11,512
Operating income	19,507	27,122
Interest and other (income) expense	2,109	1,509
Interest and investment income	(712)	(564)
Earnings before provision for income taxes	18,110	26,177
Provision for income taxes	4,309	5,235
Net earnings	$13,801	$20,942

Required:

1. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for each company in fiscal year 2022. Assume a tax rate of 30%.
2. Disaggregate the ROA into profit margin (PM) and asset turnover (AT) components. Identify which factor drives the ROA for each company.
3. Assess the trend in R&D expenses over the past five years. How does it impact each company’s innovation and long-term growth?
4. Evaluate the debt-to-equity ratio for Procter & Gamble Co. and Johnson & Johnson. What does it suggest about their financial leverage?
5. Compare the gross profit margins of Procter & Gamble Co. and Johnson & Johnson. What insights can be drawn about their production efficiency?