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Below are the financial details for Ford Motor Company's Automotive Division for the fiscal year ending December 31, Year 13: Income Statement: Sales revenue: $7,000,000

Below are the financial details for Ford Motor Company's Automotive Division for the fiscal year ending December 31, Year 13:

Income Statement:

  • Sales revenue: $7,000,000
  • Cost of sales: $4,500,000
  • Gross profit: $2,500,000
  • Operating expenses: $1,000,000
  • Depreciation: $500,000
  • Operating income: $1,000,000
  • Interest expense: $200,000
  • Loss on sale of assets: $100,000
  • Net income: $700,000

Balance Sheet:

  • Cash: $500,000
  • Accounts receivable: $800,000
  • Inventory: $900,000
  • Property, plant, and equipment (net): $1,300,000
  • Total assets: $3,500,000
  • Accounts payable: $600,000
  • Long-term debt: $800,000
  • Stockholders' equity: $2,100,000
  • Total liabilities and equity: $3,500,000

Requirements:

  1. Compute the ROI for Ford Motor Company's Automotive Division.
  2. Analyze the gross profit margin.
  3. Determine the impact of interest expense on net income.
  4. Calculate the current ratio.
  5. Discuss the significance of the loss on sale of assets.

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