Formulate the times interest earned

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Reference no: EM131487976

Question: (Evaluating profitability) In 2015, Token Corporation reported $1,230,000 in sales, cost of goods sold of $520,000, and operating expenses of $440,000. The increase in the retained earnings was $50,000. The number of common stocks shares outstanding is 70,000 and the company pays $1 dividend per share.

a. Assuming the corporation tax rate is at the level of 25 percent, construct the firm's income statement.

b. Compute Token's operating profit margin.

c. Calculate the times interest earned.

Reference no: EM131487976

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