Johnson & Johnson Income Statement For the Year Ended December 31, Year 2

• Sales revenue: $320,700
• Cost of goods sold: $170,400
• Gross profit: $150,300
• Operating expenses: $60,700
• R&D expenses: $(14,300)
• Depreciation expense: $18,000
• Operating income: $65,000
• Nonoperating income: $8,700
• Loss on sale of land: $(6,700)
• Net income: $67,000

Balance Sheet As of December 31, Year 2

• Assets:
  • Cash: $22,700
  • Accounts receivable: $48,700
  • Merchandise inventory: $38,300
  • Equipment less accumulated depreciation: $60,700
  • Nonoperating assets: $150,300
  • Total assets: $320,700
• Liabilities:
  • Accounts payable: $18,900
  • Notes payable: $32,700
  • Stockholders’ equity:
    • Common stock: $180,000
    • Retained earnings: $89,100
    • Total liabilities and stockholders’ equity: $320,700

Required:

1. Compute the gross profit margin.
2. Calculate the operating income as a percentage of net sales.
3. Determine the current ratio.
4. Evaluate the ROI for Johnson & Johnson.
5. Calculate the debt-to-equity ratio.