Reference no: EM132514076
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT(Figures in $ millions)
Net sales$12,900
Cost of goods sold 3,910
Other expenses 4,132
Depreciation 2,428
Earnings before interest and taxes (EBIT)$2,430
Interest expense 670
Income before tax$1,760
Taxes (at 35%) 616
Net income$1,144
Dividends$846
BALANCE SHEET(Figures in $ millions)
End of Year Start of Year
Assets Cash and marketable securities $86 $155
Receivables 2,232 2,430
Inventories 172 223
Other current assets 852 917
Total current assets $3,342 $3,725
Net property, plant, and equipment 19,943 19,885
Other long-term assets 4,186 3,740
Total assets $27,471 $27,350
Liabilities and shareholders' equity Payables $2,534 $3,010
Short-term debt 1,404 1,558
Other current liabilities 796 772
Total current liabilities $4,734 $5,340
Long-term debt and leases 7,765 7,370
Other long-term liabilities 6,148 6,119
Shareholders' equity 8,824 8,521
Total liabilities and shareholders' equity $27,471 $27,350
Question 1: Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.)
a.Return on equity (use average balance sheet figures)%
b.Return on assets (use average balance sheet figures)%
c.Return on capital (use average balance sheet figures)%
d.Days in inventory (use start-of-year balance sheet figures)days
e.Inventory turnover (use start-of-year balance sheet figures)
f.Average collection period (use start-of-year balance sheet figures)days
g.Operating profit margin%
h.Long-term debt ratio (use end-of-year balance sheet figures)
i.Total debt ratio (use end-of-year balance sheet figures)
j.Times interest earned
k.Cash coverage ratio
l.Current ratio (use end-of-year balance sheet figures)
m.Quick ratio (use end-of-year balance sheet figures)