Question: Presented below is summary financial data from the Corporal Agarn Soda Enterprises, Inc. annual report: (In thousands) Year 2 Year 1 Balance sheet Total assets

Presented below is summary financial data from the Corporal Agarn Soda Enterprises, Inc. annual report: (In thousands) Year 2 Year 1 Balance sheet Total assets $368,850-year1 $423,351-year2 Shareholders' equity 72,902-year1 62,372-year2

Income statement Net sales 419,760-year1 416,463-year2 Net income 10,428-year1 12,622-year2 Interest expense 834-year1 1,009-year2

A. Use the ROE model framework to assess Corporal Agarn Soda's profitability for both years.

B. Comment on the trends revealed by your analysis in Part A.

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