Refer to the following selected financial information from Gomez Electronics. Compute the company’s times interest earned for Year 2. Year 2 Year 1 Net sales $ 486,000 $ 427,750 Cost of goods sold 277,800 251,620 Interest expense 11,200 12,200 Net income before tax 68,750 54,180 Net income after tax 47,550 41,400 Total assets 320,100 297,000 Total liabilities 173,900 168,800 Total equity 146,200 128,200
Refer to the following selected financial information from Gomez Electronics. Compute the company’s times interest earned for Year 2. Year 2 Year 1 Net sales $ 486,000 $ 427,750 Cost of goods sold 277,800 251,620 Interest expense 11,200 12,200 Net income before tax 68,750 54,180 Net income after tax 47,550 41,400 Total assets 320,100 297,000 Total liabilities 173,900 168,800 Total equity 146,200 128,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Refer to the following selected financial information from Gomez Electronics. Compute the company’s times interest earned for Year 2.
| Year 2 | Year 1 | |
|---|---|---|
| Net sales | $ 486,000 | $ 427,750 |
| Cost of goods sold | 277,800 | 251,620 |
| Interest expense | 11,200 | 12,200 |
| Net income before tax | 68,750 | 54,180 |
| Net income after tax | 47,550 | 41,400 |
| Total assets | 320,100 | 297,000 |
| Total liabilities | 173,900 | 168,800 |
| Total equity | 146,200 | 128,200 |
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