Shown here are condensed income statements for two different companies (both are organized as LLQ and pay no income taxes).

Required
1. Compute times interest earned for Ellis Company.
2. Compute times interest earned for Seidel Company.
3. What happens to each company's net income if sales increase by 10%?
4. What happens to each company's net income if sales increase by 40%?
5. What happens to each company's net income if sales increase by 90%?
6. What happens to each company's net income if sales decrease by 20%?
7. What happens to each company's net income if sales decrease by 50%?
8. What happens to each company's net income if sales decrease by 80%?

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Ellis Company Seidel Company $240,000 20,000 120,000 90,000 Sales $240,000 180,000 60,000 30,000 $30,000 rable expenses (75%) Income before interest... Interest expense (fixed) . Interest expense (fixed) .. . Net income. .