Times-Interest-Earned Ratio Smith and Sons, Inc. Income Statement (in millions) Net sales Cost of goods sold Gross profit 2016 2015 10,150 9,650 (5,500) (5,200) 4,650 4,450 Selling and administrative expenses (2,800) (2,700) Income from operations Interest expense Income before income taxes Income tax expense 1,850 1,750 (300) (250) 1,550 1,500 420) (400) 1,130 1,100 Net income