Information from a Manufacturing Company's Current Year Income Statement Follows

Essay

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.
$$\begin{array} { l r } \text { Sales } & \$ 850,000 \\\text { Cost of goods sold } & 455,000 \\\text { Gross profit } & \$ 395,000 \\\text { Operating expenses } & 260,000 \\\text { Operating income } & \$ 135,000 \\\text { Interest expense } & \underline { 32,000} \\\text { Income before taxes } & \$ 103,000 \\\text { Income taxes expense } & 12,400 \\\text { Net income } & \underline { \$ 90,600}\end{array}$$