The following table provides selected financial information for Netflix, Inc. and The Walt Disney Company for the fiscal year 2022:

($ millions)	Netflix, Inc.	The Walt Disney Company
Net sales	$31,580	$89,123
Cost of sales	16,398	58,994
Gross profit	15,182	30,129
Operating expenses:
Selling, general, and administrative (SG&A)	7,923	15,374
Research and development (R&D)	1,510	4,165
Operating income	5,749	10,590
Interest and other (income) expense	1,116	2,218
Interest and investment income	(389)	(813)
Earnings before provision for income taxes	5,022	9,185
Provision for income taxes	1,257	2,379
Net earnings	$3,765	$6,806

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 27%.
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 SG&A expenses over the past five years. How does it impact each company’s operational efficiency?
4. Evaluate the interest coverage ratio for Netflix, Inc. and The Walt Disney Company. What does it reveal about their ability to meet interest obligations?
5. Compare the research and development (R&D) expenses as a percentage of sales for Netflix, Inc. and The Walt Disney Company. What insights can be drawn about their investment in innovation?