Reference no: EM131979037
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT (Figures in $ millions)
Net sales $ 12,800
Cost of goods sold 3,860
Other expenses 4,127
Depreciation 2,398
Earnings before interest and taxes (EBIT) $ 2,415
Interest expense 665
Income before tax $ 1,750
Taxes (at 30%) 525
Net income $ 1,225
Dividends $ 836
BALANCE SHEET (Figures in $ millions) End of Year Start of Year
Assets Cash and marketable securities $ 85 $ 154
Receivables 2,182 2,410
Inventories 167 218
Other current assets 847 912
Total current assets $ 3,281 $ 3,694
Net property, plant, and equipment 19,933 19,875
Other long-term assets 4,176 3,730
Total assets $ 27,390 $ 27,299
Liabilities and shareholders’ equity Payables $ 2,524 $ 3,000
Short-term debt 1,399 1,553
Other current liabilities 791 767
Total current liabilities $ 4,714 $ 5,320
Long-term debt and leases 8,014 7,549
Other long-term liabilities 6,138 6,109
Shareholders’ equity 8,524 8,321
Total liabilities and shareholders’ equity $ 27,390 $ 27,299
Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations. Round your percentage answers "Return on equity", "Return on assets", Return on capital" and "Operating profit margin" to 2 decimal places and the rest to 2 decimal places.)
a. Return on equity (Use average equity.) %
b. Return on assets (Use after-tax operating income and average assets.) %
c. Return on capital (Use after-tax operating income and average capital.) %
d. Days in inventory (Use beginning inventory.) days
e. Inventory turnover (Use beginning inventory.)
f. Average collection period (Use beginning receivables.) days
g. Operating profit margin (Use after-tax operating income.) %
h. Long-term debt ratio (Use end of year values.)
i. Total debt ratio (Use end of year values.)
j. Times interest earned
k. Cash coverage ratio
l. Current ratio (Use end of year values.)
m. Quick ratio (Use end of year values.)