Financial information for Alphabet Inc.'s Cloud Services for the fiscal year ending December 31, Year 8:

Income Statement:

• Sales revenue: $2,200,000
• Cost of sales: $1,200,000
• Gross profit: $1,000,000
• Operating expenses: $300,000
• Depreciation: $100,000
• Operating income: $600,000
• Interest expense: $40,000
• Loss on sale of assets: $10,000
• Net income: $550,000

Balance Sheet:

• Cash: $250,000
• Accounts receivable: $400,000
• Inventory: $300,000
• Property, plant, and equipment (net): $800,000
• Total assets: $1,750,000
• Accounts payable: $200,000
• Long-term debt: $350,000
• Stockholders' equity: $1,200,000
• Total liabilities and equity: $1,750,000

Requirements:

1. Calculate the ROI for Alphabet Inc.'s Cloud Services.
2. Evaluate the gross profit margin.
3. Determine the effect of operating expenses on operating income.
4. Compute the equity to asset ratio.
5. Assess the impact of interest expense on net income.