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Question
The comparative income statements for Silverlight Company are shown below. Calculate the following ratios for 2016:(a) profit margin
(b) gross margin
(c) times interest earned.
| Silverlight Company Income Statements For Years Ended December 31, | ||
| 2016 | 2015 | |
| Net sales | $720,000 | $607,500 |
| Cost of goods sold | 450,000 | 382,700 |
| Gross profit | $270,000 | $224,800 |
| Operating expense | 168,500 | 134,900 |
| Income from operations | $101,500 | $ 89,900 |
| Interest expense | 22,300 | 11,200 |
| Income before taxes | $ 79,200 | $ 78,700 |
| Income taxes | 28,000 | 27,000 |
| Net income | $ 51,200 | $ 51,700 |
Answer
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