The financial statements of XYZ Corporation for the year ended December 31, 2022, are presented below:

Income Statement
Revenue $500,000
Cost of goods sold ($250,000)
Gross profit $250,000
Operating expenses ($120,000)
Operating income $130,000
Interest expense ($20,000)
Income before taxes $110,000
Income tax expense ($30,000)
Net income $80,000

Balance Sheet
Assets
Cash $50,000
Accounts receivable $100,000
Inventory $200,000
Property, plant, and equipment $500,000
Less: Accumulated depreciation ($100,000)
Total assets $750,000

Liabilities and Equity
Accounts payable $100,000
Notes payable $50,000
Total current liabilities $150,000
Long-term debt $300,000
Common stock $200,000
Retained earnings $100,000
Total liabilities and equity $750,000

Using the above information, answer the following questions:

1.Calculate the company's gross profit margin and operating profit margin.

2.Calculate the company's inventory turnover ratio.

3.Calculate the company's debt-to-equity ratio.

4.Calculate the company's return on equity (ROE).

5.Interpret the results of your calculations and explain what they indicate about the company's financial performance.

Answer rating: 100% (QA)

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