Times-Interest-Earned Ratio Smith and Sons, Inc. Income Statement (in millions) Net sales Cost of goods sold Gross profit 2016 2015 $10,000 $9,500 (5,500) (5,200) 4,500 4,300 Selling and administrative expenses (2,800) (2,700) 1,700 1,600 (300) (250) 1,400 1,350 (420) (400) $980 $950 Income from operations Interest expense Income before income taxes Income tax expense Net income