Question 7: Profitability Analysis - analyzing returns and effects of leverage (15 marks) Selected financial statement data from Union Corporation for years 2009 to 2011 are reproduced below: Income Statement Data Revenues Operating Profit Interest expense Pretax income Income taxes (40%) Net Income Year 2009 988 Year 2010 625 53 Year 2011 528 38 88 i 35.2 52.8 53 21.2 31.8 29 11.6 17.4 Balance Sheet Data Total assets Total liabilities Total shareholders' equity Year 2009 175 0 175 Year 2010 199 38 161 Year 2011 220 165 Required; a. Calculate ROA for years 2009 to year 2011. (3 marks) b. Calculate the financial leverage for years 2009 to year 2011. (3 marks) c. Given ROE ROA x financial leverage, calculate ROE for years 2009 to year 2011. (3 marks) d. Comment on the Corporation's ROA and ROE over the years. (6 marks)