Times-Interest-Earned Ratio Smith and Sons, Inc. Income Statement (in millions) Net sales 2016 2015 Cost of goods sold Gross profit 9,950 9,450 (5.500) (5,200) 4,450 4,250 Selling and administrative expenses (2,800) (2,700) Income from operations 1,650 1,550 Interest expense (300) (250) Income before income taxes 1,350 1,300 Income tax expense (420) (400) Net income 930 900