Royal Enfield Bullet Company$$s financial statements of for the period $20152020$ are

presented below. Royal Enfield was considered one of the success stories of the $2000$s$,$ having

introduced world$-$class management techniques to turn around the company. At the same time,

however, an examination of the company$$s return on equity indicates that after initial growth,

the ratio stabilized and then declined.

Comparative Income Statements of Royal Enfield Bullet.

for the Year Ended $2015$ to $2020($in $ Millions$)$

$201520162017201820192020$

Sales $287\mathrm{.}48295\mathrm{.}32685\mathrm{.}36757\mathrm{.}38790\mathrm{.}97864\mathrm{.}6$

Cost of goods sold $209\mathrm{.}69210\mathrm{.}45506\mathrm{.}91559\mathrm{.}53582\mathrm{.}7619\mathrm{.}1$

Selling, general, and admin. expenses $57\mathrm{.}3460\mathrm{.}06104\mathrm{.}14111\mathrm{.}91127\mathrm{.}61144\mathrm{.}27$

Depreciation $7\mathrm{.}538\mathrm{.}7214\mathrm{.}8615\mathrm{.}7314\mathrm{.}2316\mathrm{.}45$

Operating Profit $12\mathrm{.}9216\mathrm{.}0959\mathrm{.}4570\mathrm{.}2166\mathrm{.}4384\mathrm{.}78$

Other Income $00\mathrm{.}750\mathrm{.}524\mathrm{.}384\mathrm{.}540$

Other Expense $0\mathrm{.}3403\mathrm{.}63\mathrm{.}9010\mathrm{.}72$

Profit Before Interest and Tax $12\mathrm{.}5816\mathrm{.}8456\mathrm{.}3770\mathrm{.}6970\mathrm{.}9774\mathrm{.}06$

Interest $9\mathrm{.}419\mathrm{.}5125\mathrm{.}5124\mathrm{.}6717\mathrm{.}9611\mathrm{.}44$

Profit Before Tax $3\mathrm{.}177\mathrm{.}3330\mathrm{.}8646\mathrm{.}0253\mathrm{.}0162\mathrm{.}62$

Income Tax Expense $0\mathrm{.}533\mathrm{.}0313\mathrm{.}0818\mathrm{.}8520\mathrm{.}424\mathrm{.}31$

Net Income $2\mathrm{.}644\mathrm{.}317\mathrm{.}7827\mathrm{.}1732\mathrm{.}6138\mathrm{.}31$

Condensed Comparative Balance Sheets of Royal Enfield Bullet Co $2015$ to $2020($in $

Millions$)$

$201520162017201820192020$

Assets

Current assets $$72\mathrm{.}89$ $$148\mathrm{.}76$ $$197\mathrm{.}90$ $$211\mathrm{.}29$ $$187\mathrm{.}67$ $$196\mathrm{.}68$

Net property $38\mathrm{.}7390\mathrm{.}93100\mathrm{.}43110\mathrm{.}79115\mathrm{.}7136\mathrm{.}05$

Intangibles $--82\mathrm{.}1174\mathrm{.}1670\mathrm{.}2166\mathrm{.}1963\mathrm{.}08$

Other assets $2\mathrm{.}475\mathrm{.}398\mathrm{.}388\mathrm{.}829\mathrm{.}3611\mathrm{.}65$

Total assets $$114\mathrm{.}09$ $$327\mathrm{.}19$ $$380\mathrm{.}87$ $$401\mathrm{.}11$ $$378\mathrm{.}92$ $$407\mathrm{.}46$

Liabilities and Equity

Current debt $$2\mathrm{.}88$ $$18\mathrm{.}09$ $$28\mathrm{.}33$ $$33\mathrm{.}23$ $$26\mathrm{.}93$ $$23\mathrm{.}86$

Other current liabilities $53\mathrm{.}7790\mathrm{.}73105\mathrm{.}35103\mathrm{.}16109\mathrm{.}43122\mathrm{.}67$

Long$-$term debt $51\mathrm{.}5191\mathrm{.}59178\mathrm{.}76135\mathrm{.}1874\mathrm{.}7948\mathrm{.}34$

Other liabilities $1\mathrm{.}320\mathrm{.}625\mathrm{.}527\mathrm{.}8911\mathrm{.}5213\mathrm{.}82$

Total liabilities $$109\mathrm{.}47$ $$301\mathrm{.}03$ $$317\mathrm{.}96$ $$279\mathrm{.}46$ $$222\mathrm{.}67$ $$208\mathrm{.}69$

Stockholders$$ equity $4\mathrm{.}6226\mathrm{.}1662\mathrm{.}91121\mathrm{.}65156\mathrm{.}25198\mathrm{.}77$

Total liabilities & equity $$114\mathrm{.}09$ $$327\mathrm{.}19$ $$380\mathrm{.}87$ $$401\mathrm{.}11$ $$378\mathrm{.}92$ $$407\mathrm{.}46$

a$.$ Calculate Return on Equity $($ROE$)$ of Royal Enfield Bullet for the period $2016-2020$

b$.$ Discuss the drivers of ROE over the period $($The answer should be analytical$).$