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Times-Interest-Earned Ratio
| EVANS and Sons, Inc. Income Statement |
| (in millions) | 2019 | 2018 |
| Net sales | $9,800 | $9,300 |
| Cost of goods sold | (5,500) | (5,200) |
| Gross profit | 4,300 | 4,100 |
| Selling and administrative expenses | (2,800) | (2,700) |
| Income from operations | 1,500 | 1,400 |
| Interest expense | (300) | (250) |
| Income before income taxes | 1,200 | 1,150 |
| Income tax expense | (220) | (200) |
| Net income | $980 | $950 |
| EVANS and Sons, Inc. Balance Sheet |
| (in millions) | 2019 | 2018 |
| Assets |
| Current assets |
| Cash and cash equivalents | $100 | $300 |
| Accounts receivable | 900 | 800 |
| Inventory | 500 | 650 |
| Other current assets | 400 | 250 |
| Total current assets | 1,900 | 2,000 |
| Property, plant & equipment, net | 2,600 | 2,500 |
| Other assets | 5,700 | 5,900 |
| Total Assets | $10,200 | $10,400 |
| Liabilities and Stockholders' Equity |
| Current liabilities | $3,000 | $2,900 |
| Long-term liabilities | 5,000 | 5,400 |
| Total liabilities | 8,000 | 8,300 |
| Stockholders' equity-common | 2,200 | 2,100 |
| Total Liabilities and Stockholders' Equity | $10,200 | $10,400 |
Calculate the times-interest-earned ratio for Evans & Sons, Inc., for 2018 and 2019.
Round answers to two decimal places.
Answer & Explanation
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