For the fiscal year 2022, the income statements for Verizon Communications Inc. and AT&T Inc. are provided:

($ millions)	Verizon Communications Inc.	AT&T Inc.
Net sales	$136,835	$121,854
Cost of sales	66,489	56,781
Gross profit	70,346	65,073
Operating expenses:
Selling, general, and administrative (SG&A)	32,742	29,184
Research and development (R&D)	7,891	6,324
Operating income	29,713	29,565
Interest and other (income) expense	7,284	6,738
Interest and investment income	(1,984)	(1,839)
Earnings before provision for income taxes	24,413	24,666
Provision for income taxes	6,103	6,216
Net earnings	$18,310	$18,450

Required:

1. Calculate 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 25%.
2. Disaggregate the ROA into profit margin (PM) and asset turnover (AT) components. Identify which factor drives the ROA for each company.
3. Analyze the trend in operating income over the past five years. How does it impact each company’s financial health and ability to invest in network expansion?
4. Evaluate the interest coverage ratio for Verizon Communications Inc. and AT&T Inc. What does it reveal about their ability to meet interest obligations?
5. Compare the net profit margins of Verizon Communications Inc. and AT&T Inc. What insights can be drawn about their cost management and profitability?