Company: Bristol-Myers Squibb
 Data for the year ended December 31, 2023:

Item	Amount
Revenue	$25,000,000,000
Cost of Goods Sold	$8,000,000,000
Operating Expenses	$10,000,000,000
Income Tax Expense	$4,000,000,000
Net Income	$3,000,000,000
Total Assets	$70,000,000,000
Total Liabilities	$30,000,000,000
Shareholders' Equity	$40,000,000,000

Managerial Accounting Process:

1. Recording Costs:
   • Bristol-Myers Squibb records its cost of goods sold (COGS) at $8 billion, representing costs related to manufacturing pharmaceutical products.
   • Operating expenses, including R&D, sales and marketing, and administrative costs, are recorded at $10 billion.

1. Analyzing Costs:
   • Analyze R&D costs to assess the return on investment in drug development and clinical trials.
   • Conduct cost-volume-profit analysis to evaluate the profitability of new drugs versus existing product lines.

1. Reporting Costs:
   • Present COGS in the income statement to illustrate the direct costs associated with producing pharmaceutical products.
   • Detail operating expenses to provide transparency on costs incurred to support R&D efforts, marketing campaigns, and sales activities.
   • Provide cost efficiency reports to management to optimize spending on R&D and operational activities.

Requirements:

1. Calculate Bristol-Myers Squibb's gross profit margin and discuss cost management strategies in the pharmaceutical industry.
2. Determine Bristol-Myers Squibb's operating profit margin and analyze the impact of cost controls on profitability and innovation.
3. Analyze the impact of income tax expense on Bristol-Myers Squibb's net income and propose tax strategies to manage tax liabilities.
4. Evaluate how Bristol-Myers Squibb recognizes revenue from pharmaceutical sales and its relationship with cost management.
5. Explain the significance of the Income Measurement Objective in Bristol-Myers Squibb's financial reporting and its alignment with cost allocation.
6. Discuss Bristol-Myers Squibb's debt-to-equity ratio and liquidity ratios, considering the influence of cost management on financial leverage.