JKL Corporation

Income Statement (in $ millions)

Item	Amount
Sales Revenue	6,000
Cost of Sales	3,500
Gross Profit	2,500
Operating Expenses	1,800
Operating Profit	700
Interest Expenses	90
Income Tax Expense	70
Net Income	540

Balance Sheet (in $ millions)

Assets

• Current Assets
  • Cash: 60
  • Accounts Receivable: 300
  • Inventory: 500
  • Total Current Assets: 860
• Long-Term Assets
  • Property, Plant & Equipment (net): 800
  • Other Assets: 600
  • Total Long-Term Assets: 1,400
• Total Assets: 2,260

Liabilities and Equity

• Current Liabilities
  • Trade Creditors: 300
  • Short-Term Bank Loans: 200
  • Total Current Liabilities: 500
• Long-Term Liabilities
  • Long-Term Debt: 900
  • Other Liabilities: 150
  • Total Long-Term Liabilities: 1,050
• Total Liabilities: 1,550
• Equity
  • Common Shares: 350
  • Retained Earnings: 360
  • Total Equity: 710
• Total Liabilities and Equity: 2,260

Required:

1. Calculate the gross profit margin and net profit margin for JKL Corporation.
2. Determine the company's return on equity (ROE) and return on assets (ROA).
3. Assess the company’s liquidity using the current ratio and quick ratio.
4. JKL Corporation is considering refinancing its long-term debt to lower the interest expense. Discuss the potential benefits and risks.
5. Propose measures to enhance the company's operating efficiency and profitability.