Tesla, Inc. Income Statement For the Year Ended December 31, Year 2

• Sales revenue: $300,000
• Cost of goods sold: $180,000
• Gross profit: $120,000
• Operating expenses: $70,000
• R&D expenses: $(15,000)
• Depreciation expense: $20,000
• Operating income: $45,000
• Nonoperating income: $5,000
• Loss on sale of machinery: $(3,000)
• Net income: $47,000

Balance Sheet As of December 31, Year 2

• Assets:
  • Cash: $25,000
  • Accounts receivable: $50,000
  • Merchandise inventory: $45,000
  • Equipment less accumulated depreciation: $60,000
  • Nonoperating assets: $120,000
  • Total assets: $300,000
• Liabilities:
  • Accounts payable: $20,000
  • Notes payable: $30,000
  • Stockholders’ equity:
    • Common stock: $150,000
    • Retained earnings: $100,000
    • Total liabilities and stockholders’ equity: $300,000

Required:

1. Compute the gross profit margin.
2. Calculate the current ratio.
3. Determine the debt-to-equity ratio.
4. Evaluate the ROI for Tesla, Inc.
5. Calculate the operating margin.