Gross Profit Margin

Accounting and Finance

1 The Sally Corporation’s income statement is given below

Sally Corporation

Sales$250,000

Cost of Goods Sold 145,000

Gross Profit105,000

Fixed Charges (other than interest) 25,000

Income before interest and taxes80,000

Interest20,000

Income before taxes 60,000

Taxes (35%) 21,000

Income after taxes$39,000

a What is Sally’s Time-Interest-Earned Ratio?

b What is the Fixed-Charge-Coverage Ratio? Go to
investopediacom Formula is given

c What is the Net Profit Margin?

d What is the Gross Profit Margin?