Financial statements for Microsoft Technology Division for the fiscal year ending June 30, Year 4:

Income Statement:

• Sales revenue: $1,200,000
• Cost of goods sold: $800,000
• Gross profit: $400,000
• Selling and administrative expenses: $100,000
• Depreciation: $50,000
• Operating income: $250,000
• Interest expense: $20,000
• Gain on sale of investments: $30,000
• Net income: $260,000

Balance Sheet:

• Cash: $100,000
• Accounts receivable: $150,000
• Inventory: $200,000
• Property, plant, and equipment (net): $500,000
• Total assets: $950,000
• Accounts payable: $100,000
• Long-term liabilities: $150,000
• Stockholders' equity: $700,000
• Total liabilities and equity: $950,000

Requirements:

1. Calculate the ROI for Microsoft's Technology Division.
2. Evaluate the operating margin.
3. Determine the effect of the gain on sale of investments on net income.
4. Compute the equity ratio.
5. Assess the overall financial health based on the balance sheet.