QUESTION 3 At the time that of its 10-Q filing of financial statements for the first half of its January 2002 fiscal year, Home Depot's shares traded at $50 per share. The following are summaries from those financial statements. Balance Sheet, July 29, 2001 (in millions of dollars) Financial liabilities Operating assets 23,457 Operating liabilities Financial assets 1.221 Common equity 16.649 (on 2,336 million outstanding shares) 24.678 24.678 Statement of Earnings. Six Months Ended. July 29.2001 (in millions of dollars) 1,320 6,709 26,776 18.795 7,981 Net sales Cost of Merchandise Sold Gross Profit Operating Expenses: Selling and Store Operating Pre-Opening General and Administrative Total Operating Expenses 4,963 59 436 5,458 treneral and Administrative Total Operating Expenses 436 5.458 2,523 Operating Income Interest Income (Expense): Interest and Investment Income Interest Expense Interest, Net Earnings Before Income Taxes Income Taxes 22 (11) 11 2,534 978 Net Earnings 1.556 According to financial statement footnotes, Home Depot's statutory tax rate (combined Federal and State rates) is 39%. Other comprehensive income (not in net earnings above) is negligible. Use a required six-month return for operations of 4% in calculations below. Calculate the following from these statements: a. Financial leverage b. Operating liability leverage c. After-tax profit margin