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Times-Interest-Earned Ratio Smith and Sons, Inc. Income Statement (in millions) 2016 2015 Net sales 10,300 9,800 Cost of goods sold (5,500) (5,200) Gross profit 4,800
Times-Interest-Earned Ratio
Smith and Sons, Inc. Income Statement | ||
---|---|---|
(in millions) | 2016 | 2015 |
Net sales | 10,300 | 9,800 |
Cost of goods sold | (5,500) | (5,200) |
Gross profit | 4,800 | 4,600 |
Selling and administrative expenses | (2,800) | (2,700) |
Income from operations | 2,000 | 1,900 |
Interest expense | (300) | (250) |
Income before income taxes | 1,700 | 1,650 |
Income tax expense | (420) | (400) |
Net income | 1,280 | 1,250 |
Smith and Sons, Inc. Balance Sheet | ||
---|---|---|
(in millions) | 2016 | 2015 |
Assets | ||
Current assets | ||
Cash and cash equivalents | 450 | 650 |
Accounts receivable | 900 | 800 |
Inventory | 750 | 900 |
Other current assets | 400 | 250 |
Total current assets | 2,500 | 2,600 |
Property, plant & equipment, net | 2,350 | 2,250 |
Other assets | 5,700 | 5,900 |
Total Assets | 10,550 | 10,750 |
Liabilities and Stockholders' Equity | ||
Current liabilities | 3,250 | 3,150 |
Long-term liabilities | 5,000 | 5,400 |
Total liabilities | 8,250 | 8,550 |
Stockholders' equity-common | 2,300 | 2,200 |
Total Liabilities and Stockholders' Equity | 10,550 | 10,750 |
Calculate the times-interest-earned ratio for Smith & Sons, Inc., for 2015 and 2016.
Round answers to two decimal places.
2015 |
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2016 |
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