Gross Profit Margin

Accounting and Finance

1 The Sally Corporation’s income statement is given below

Sally Corporation


Cost of Goods Sold 145,000

Gross Profit105,000

Fixed Charges (other than interest) 25,000

Income before interest and taxes80,000


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?


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