The comparative income statements for Silverlight Company are shown below. Calculate the following ratios for Year 2:(a) profit margin(b) gross margin(c) times interest earned.Silverlight CompanyIncome StatementsFor Years Ended December 31, ?Year 2Year 1Net sales$720,000$607,500Cost of goods sold 450,000 382,700Gross profit$270,000$224,800Operating expense 168,500 134,900Income from operations$101,500$ 89,900Interest expense 22,300 11,200Income before taxes$ 79,200$ 78,700Income taxes 28,000 27,000Net income$ 51,200$ 51,700
What will be an ideal response?
| (a) $51,200/$720,000 = | 7.1% |
| ? | ? |
| (b) $270,000/$720,000 = | 37.5% |
| ? | ? |
| (c) $101,500/$22,300 = | 4.55 times |
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