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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:

  1. Calculate the gross profit margin.
  2. Determine the operating profit margin.
  3. Compute the return on equity (ROE).
  4. Calculate the current ratio.
  5. Find the interest coverage ratio.

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