Here are the financial statements for Tesla Energy Division for the year ended December 31, Year 7:

Income Statement:

• Sales revenue: $800,000
• Cost of sales: $400,000
• Gross profit: $400,000
• Operating expenses: $150,000
• Depreciation: $50,000
• Operating income: $200,000
• Interest expense: $30,000
• Gain on sale of assets: $20,000
• Net income: $190,000

Balance Sheet:

• Cash: $100,000
• Accounts receivable: $120,000
• Inventory: $200,000
• Property and equipment (net): $300,000
• Total assets: $720,000
• Accounts payable: $120,000
• Long-term debt: $180,000
• Stockholders' equity: $420,000
• Total liabilities and equity: $720,000

Requirements:

1. Compute the ROI for Tesla Energy Division.
2. Analyze the gross profit margin.
3. Determine the impact of depreciation on operating income.
4. Calculate the current ratio.
5. Discuss the significance of net income in relation to total equity.