Boeing Company Income Statement for the Year Ended December 31, Year 18

• Sales revenue: $5,500,000
• Cost of goods sold: $3,800,000
• Gross margin: $1,700,000
• Operating expenses:
  • Selling expenses: $550,000
  • Depreciation expenses: $400,000
• Operating income: $750,000
• Nonoperating items: $220,000
• Net income: $530,000

Balance Sheet as of December 31, Year 18

• Assets:
  • Cash: $450,000
  • Accounts receivable: $1,000,000
  • Merchandise inventory: $900,000
  • Equipment (less accumulated depreciation): $1,200,000
  • Nonoperating assets: $950,000
• Total assets: $4,500,000
• Liabilities:
  • Accounts payable: $450,000
  • Notes payable: $400,000
  • Stockholders' equity: $3,650,000
• Total liabilities and stockholders' equity: $4,500,000

Required:

a. Calculate the gross margin percentage. b. Calculate the operating margin percentage. c. Calculate the return on assets (ROA). d. Calculate the return on equity (ROE). e. Boeing Company is considering a stock buyback of $500,000. Calculate the new ROE if the net income remains the same.