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Times-Interest-Earned Tsao Company provided the following income statement for last year: Sales $16,250,000 Cost of goods sold 6,500,000 Gross margin $ 9,750,000 Operating expenses 3,750,000
Times-Interest-Earned
Tsao Company provided the following income statement for last year:
| Sales | $16,250,000 |
| Cost of goods sold | 6,500,000 |
| Gross margin | $ 9,750,000 |
| Operating expenses | 3,750,000 |
| Operating income | $ 6,000,000 |
| Interest expense | 500,000 |
| Income before taxes | $ 5,500,000 |
| Income taxes | 1,650,000 |
| Net income | $ 3,850,000 |
Required:
Calculate the times-interest-earned ratio. _________times
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