Information from a manufacturing company's current year income statement follows. Calculate the company's (a) profit margin ratio, (b) gross margin ratio, and (c) times interest earned. Sales$850,000Cost of goods sold455,000Gross profit$395,000Operating expenses260,000Operating income$ 135,000Interest expense32,000Income before taxes$103,000Income taxes expense12,400Net income$ 90,600
What will be an ideal response?
| (a) $90,600/$850,000 = | 10.7% |
| (b) $395,000/$850,000 = | 46.5% |
| (c) $135,000/$32,000 = | 4.2 |
Business
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