Question 2

Apple Inc. has provided the following data for its iPhone segment for the year ended September 30, 2023:

Income Statement

• Sales revenue: $200,000,000
• Cost of goods sold: $120,000,000
• Gross margin: $80,000,000
• Operating expenses:
  • R&D expenses: $20,000,000
  • Marketing expenses: $15,000,000
  • Administrative expenses: $10,000,000
• Operating income: $35,000,000
• Nonoperating items:
  • Interest income: $1,000,000
  • Gain on sale of investment: $3,000,000
• Net income: $39,000,000

Balance Sheet

• Assets:
  • Cash: $10,000,000
  • Accounts receivable: $5,000,000
  • Inventory: $20,000,000
  • Equipment: $50,000,000
• Total assets: $85,000,000
• Liabilities:
  • Accounts payable: $5,000,000
  • Short-term debt: $10,000,000
  • Long-term debt: $20,000,000
• Stockholders' equity: $50,000,000
• Total liabilities and stockholders' equity: $85,000,000

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 quick ratio.