Question

Alpha Co. has interest expense of $1.2 million, total assets of $84 million, sales of $76 million, long-term debt of $16.4 million, and net income of $12.1 million. How will interest expense be recorded in the common-size income statement?

Answer 1

interest expense = 1.58 %

Step-by-step explanation:

given data

interest expense = $1.2 million

total assets = $84 million

sales = $76 million

long-term debt = $16.4 million

net income = $12.1 million

solution

interest expense = interest expense ÷ sales ................1

put here value and we get

interest expense =
`(1.2)/(76)`

interest expense = 0.01576

interest expense = 1.58 %