Here are the financial details for the Procter & Gamble Manufacturing Unit for the year ended December 31, Year 3:

Income Statement:

• Sales revenue: $500,000
• Cost of goods sold: $300,000
• Gross margin: $200,000
• Operating expenses: $50,000
• Depreciation expense: $30,000
• Operating income: $120,000
• Non-operating income: $10,000
• Loss on sale of machinery: $5,000
• Net income: $105,000

Balance Sheet:

• Cash: $25,000
• Accounts receivable: $50,000
• Inventory: $60,000
• Plant and equipment (net): $150,000
• Other assets: $40,000
• Total assets: $325,000
• Accounts payable: $50,000
• Long-term debt: $75,000
• Stockholders' equity: $200,000
• Total liabilities and equity: $325,000

Requirements:

1. Compute the ROI for Procter & Gamble Manufacturing Unit.
2. Analyze the operating income margin.
3. Determine the impact of the loss on the sale of machinery on net income.
4. Calculate the debt to equity ratio.
5. Explain how the gross margin impacts the overall profitability.