Problem 11-5A Computing and analyzing times interest earned LO A1

[The following information applies to the questions displayed below.]

Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes).

Miller Company
Sales	$	1,200,000
Variable expenses (80%)		960,000
Income before interest		240,000
Interest expense (fixed)		74,000
Net income	$	166,000

Weaver Company
Sales	$	1,200,000
Variable expenses (60%)		720,000
Income before interest		480,000
Interest expense (fixed)		314,000
Net income	$	166,000

1. Compute times interest earned for Miller Company.

Times interest earned for Miller Company
Choose Numerator:	/	Choose Denominator:	=	Times interest earned
	/		=	Times interest earned
	/		=	0

2. Compute times interest earned for Weaver Company.

Times interest earned for Weaver Company
Choose Numerator:	/	Choose Denominator:	=	Times interest earned
	/		=	Times interest earned
	/		=	0

3. What happens to each company's net income if sales increase by 20%. (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%

4. What happens to each company's net income if sales increase by 30%? (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%

5. What happens to each company's net income if sales increase by 60%? (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%

6. What happens to each company's net income if sales decrease by 20%? (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%

7. What happens to each company's net income if sales decrease by 30%? (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%

8. What happens to each company's net income if sales decrease by 40%? (Round your answers to nearest whole percent.)

Company	Net income
Miller Co.			%
Weaver Co.			%