The Comparative Income Statements for Silverlight Company Are Shown Below $$\text { Silverlight CompanyIncome StatementsFor Years Ended December 31, }$$

question 147

Essay

The comparative income statements for Silverlight Company are shown below.Calculate the following ratios for 2018:
(a)profit margin
(b)gross margin
(c)times interest earned.
$$\text { Silverlight CompanyIncome StatementsFor Years Ended December 31, }$$
$\begin{array}{|l|r|r|}\hline&2018&2017\\\hline \text { Net sales } & \$ 720,000 & \$ 607,500 \\\hline \text { Cost of goods sold } & 450,000 & 382,700 \\\hline \text { Gross profit } & \$ 270,000 & \$ 224,800 \\\hline \text { Operating expense } & 168,500 & 134,900 \\\hline \text { Income from operations } & \$ 101,500 & \$ 89,900 \\\hline \text { Interest expense } & 22,300 & 11,200 \\\hline \text { Income before taxes } & \$ 79,200 & \$ 78,700 \\\hline \text { Income taxes } & 28,000 & 27,000 \\\hline \text { Net income } & \$ 51,200 & \$ 51,700 \\\hline\end{array}$

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