Procter & Gamble Income Statement For the Year Ended June 30, Year 2

• Net sales: $250,800
• Cost of goods sold: $130,400
• Gross profit: $120,400
• Operating expenses: $50,800
• Administrative expenses: $(7,600)
• Depreciation expense: $12,000
• Operating income: $65,200
• Other expenses: $5,400
• Gain on sale of equipment: $3,500
• Net income: $63,300

Balance Sheet As of June 30, Year 2

• Assets:
  • Cash: $20,800
  • Accounts receivable: $45,700
  • Merchandise inventory: $33,200
  • Equipment less accumulated depreciation: $50,800
  • Nonoperating assets: $80,300
  • Total assets: $230,800
• Liabilities:
  • Accounts payable: $14,900
  • Notes payable: $22,300
  • Stockholders’ equity:
    • Common stock: $130,000
    • Retained earnings: $63,600
    • Total liabilities and stockholders’ equity: $230,800

Required:

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