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

question 170

Short Answer

Information from a manufacturing company's current year income statement follows for the current year:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 800,000 \\\hline \text { Cost of goods sold } & 455,000 \\\hline \text { Gross profit } & \$ 345,000 \\\hline \text { Operating expenses } & 265,000 \\\hline \text { Operating income } & \$ 80,000 \\\hline \text { Interest expense } & \underline{32,000} \\\hline \text { Income before taxes } & \$ 48,000 \\\hline \text { Income taxes expense } & \underline{12,400} \\\hline \text { Net income } & \underline{35,600} \\\hline\end{array}$
Calculate the company's times interest earned.

---

Definitions:

Cash Flow from Assets

A measure of the amount of cash generated by a company's investments in assets after accounting for financing and operations.

Positive

Characterized by or displaying affirmation or acceptance or certainty.

Long-term

Refers to holding investments or assets for a duration typically exceeding one year.

Capital Structure

The composition of a firm's financing through a combination of debt and equity.