Consider the following condensed financial statements of Pure Life, Inc. The company's target rate of return is 30%.
PURE LIFE, INC.
Income Statement
For the Year Ended December 31, 2018
Net Sales Revenue ....................................... $ 6,000,000
Cost of Goods Sold ......................................... 3,700,000
Gross Profit .................................................. 2,300,000
Operating Expenses ......................................... 2,000,000
Operating Income ............................................. 300,000
Other Income and (Expenses):
Interest Expense ............................................. (34,000)
Income Before Income Tax Expense ...................... 266,000
Income Tax Expense ......................................... 93,100
Net Income ................................................ $ 172,900
PURE LIFE, INC.
Comparative Balance Sheet
As of December 31, 2018 and 2017

Requirements
1. Calculate the company's ROI. Round all of your answers to four decimal places.
2. Calculate the company's profit margin ratio. Interpret your results.
3. Calculate the company's asset turnover ratio. Interpret your results.
4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.
5. Calculate the company's RI. Interpret your results?

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2017 2018 Assets $ 76,000 $ 62,000 Cash 26,800 Accounts Receivable 61,400 Supplies 200 600 305,000 Property, Plant, and Equipment, net 204,000 101,000 Patents, net 163,000 $ 606,000 $ 394,000 Total Assets Liabilities and Stockholders' Equity $ 29,000 $ 31,000 Accounts Payable Short-term Notes Payable 52,000 148,000 196,000 126,500 Long-term Notes Payable Common Stock, no Par 205,500 169,000 Retained Earnings 27,500 15,500 $ 606,000 $ 394,000 Total Liabilities and Stockholders' Equity