Microsoft Corporation Income Statement For the Year Ended June 30, Year 2

• Net sales: $350,400
• Cost of goods sold: $200,100
• Gross profit: $150,300
• Operating expenses: $60,500
• Administrative expenses: $(9,500)
• Depreciation expense: $14,000
• Operating income: $65,300
• Other expenses: $8,500
• Gain on sale of equipment: $5,600
• Net income: $62,400

Balance Sheet As of June 30, Year 2

• Assets:
  • Cash: $28,300
  • Accounts receivable: $52,400
  • Merchandise inventory: $39,200
  • Equipment less accumulated depreciation: $60,400
  • Nonoperating assets: $170,100
  • Total assets: $350,400
• Liabilities:
  • Accounts payable: $18,200
  • Notes payable: $30,600
  • Stockholders’ equity:
    • Common stock: $200,000
    • Retained earnings: $101,600
    • Total liabilities and stockholders’ equity: $350,400

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 Microsoft Corporation.
5. Calculate the debt-to-equity ratio.