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IBM has shared the following data for its Global Technology Services segment for the year ended December 31, 2023: Income Statement Sales revenue: $70,000,000 Cost
IBM has shared the following data for its Global Technology Services segment for the year ended December 31, 2023:
Income Statement
- Sales revenue: $70,000,000
- Cost of goods sold: $35,000,000
- Gross margin: $35,000,000
- Operating expenses:
- R&D expenses: $10,000,000
- Marketing expenses: $7,000,000
- Operating income: $18,000,000
- Nonoperating items:
- Interest expense: $2,000,000
- Loss on sale of investments: $1,000,000
- Net income: $15,000,000
Balance Sheet
- Assets:
- Cash: $5,000,000
- Accounts receivable: $7,000,000
- Inventory: $3,000,000
- Property, plant, and equipment: $25,000,000
- Total assets: $40,000,000
- Liabilities:
- Accounts payable: $2,000,000
- Short-term loans: $5,000,000
- Long-term debt: $15,000,000
- Stockholders' equity: $18,000,000
- Total liabilities and stockholders' equity: $40,000,000
Requirements:
- Calculate the gross profit margin.
- Determine the operating profit margin.
- Compute the return on equity (ROE).
- Calculate the current ratio.
- Find the interest coverage ratio.
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