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For the FY 2016, Alpha Company had net sales of $850,000 and net income of $50,000, paid income taxes of $20,000, and had before tax interest expense of $10,000. Use this information to determine the: (Round & enter your answers to one decimal place and enter the value.) 1. Times Interest Earned Ratio 2. Profit Margin
Expert Answer
| Statementshowing Computations | |
| Paticulars | Amount |
| Net Income | 50,000.00 |
| Add Tax | 20,000.00 |
| EBT | 70,000.00 |
| Interest Expense | 10,000.00 |
| EBIT | 80,000.00 |
| Times interest earned = EBIT/Int = 80000/10000 | 8.00 |
| Profit Margin = Net income/Sales = 50000/850000 | 5.88% |
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Question & Answer: For the FY 2016, Alpha Company had net sales of $850,000 and net income of $50,000, paid income taxes of $20,000, and…..
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