Jose, a financial expert of Cerione Ltd., analyzes the data given below. What conclusion is he likely to arrive at?

Sales	$161,000
Cost of goods sold	110,000
Gross margin	$ 51,000
Total selling and administrative expenses	39,500
Net operating income	$ 11,500
Interest expenses	2,170
Net income before taxes	$ 9,330
Income tax (30%)	2,799
Net income	$ 6,531

• The company does not have adequate resources to pay the interest due to creditors.

• The companys earnings before interest is the same as its earnings after taxes.

• The company has sufficient resources to pay the interest due to creditors.

• The companys gross margin is 20 percent