1. Blue Ocean Traders and Red Sea Merchants reported the following for 2023: Blue Ocean Traders:

• Revenue: $40 million
• COGS: $24 million
• Operating Expenses: $10 million
• Net Income: $4 million
• Total Assets: $50 million
• Total Liabilities: $20 million

Red Sea Merchants:

• Revenue: $35 million
• COGS: $18 million
• Operating Expenses: $12 million
• Net Income: $3 million
• Total Assets: $45 million
• Total Liabilities: $25 million
• Compare the gross profit margins of both companies.
• Calculate the operating profit margins.
• Determine which company has a better debt-to-equity ratio.