Answer Happy

$ The following financial information is excerpted from the 2006 annual report of Retail Products, Inc. Balance Sheet (in thousands) 2006 2005 Current assets 449,195 $ 433, 049 Investments 32,822 55,072 Deferred charges 4,905 12,769 Property, plant, and equipment, net 350,921 403, 128 Trademarks and leaseholds 45,031 47,004 Excess of cost over fair market value of net assets acquired 272,146 276,639 Assets held for disposal 6,062 10,247 $ 1,161,082 $1,237, 908 Total liabilities Total stockholders' equity $ 689,535 $721,149 471,547 516, 759 $ 1,161, 082 $1,237,908 1 Income Statement Net sales $ 2,020,526 $1,841,738 Cost of goods sold (2,018, 436) (1,787,126) Selling and administrative (300,000) (250,000) Interest expense (40,000) (30,000) Net income (loss) $ (337,910) $ (225, 388) Required: For each year compute: a. comment on the results b. what does times interest earned ratio of less 1 to 1? Does it also mean that the company cannot meet its interest payments?