Do the assigned questions using Malimash, Inc.s 2014 financial data below:

Malimash, Inc. 2014 Financial Data ($ millions) Income Statement Data

Sales Revenue $7,120.00

Depreciation $230.00

Interest Expense $10.00

Pretax Income $2,550.00

Income Taxes $900.00

Net Income $1,650.00

Balance Sheet Data

Current Assets $4,850.00

Fixed Assets, Net $2,400.00

Total Assets $7,250.00

Current Liabilities $3,290.00

Long-Term Debt $100.00

Shareholders' Equity $3,860.00

Total Liabilities and Shareholders' Equity $7,250.00

Required: Calculate return on common equity for 2014 using year-end amounts and assuming no preferred dividends.

Disaggregate the ROCE into operating (RNOA) and non-operating components.

Comment on Mercks use of leverage. (Assume all assets and current liabilities are operating at a 35% tax rate).