Last year, Davies Inc. had sales of $ 400,000 with a cost of goods sold of $ 112,000. The firm’s operating expenses were $ 130,000, and its increase in retained earnings was $ 58,000. There are currently 22,000 common stock shares outstanding and the firm pays a $ 1.60 dividend per share.
a. Assuming the firm’s earnings are taxed at 34 percent, construct the firm’s income statement.
b. Compute the firm’s operating profit margin.
c. What was the times interest earned?