Reference no: EM132523515
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT(Figures in $ millions)
Net sales$13,300
Cost of goods sold 4,160
Other expenses 4,087
Depreciation 2,578
Earnings before interest and taxes (EBIT)$2,475
Interest expense 695
Income before tax$1,780
Taxes (at 30%) 534
Net income$1,246
Dividends$876
BALANCE SHEET(Figures in $ millions)
End of Year---- Start of Year
Assets
Cash and marketable securities$91 $160
Receivables 2,482 2,530
Inventories 197 248
Other current assets 877 942
Total current assets$3,647 $3,880
Net property, plant, and equipment 19,993 19,935
Other long-term assets 4,236 3,790
Total assets$27,876 $27,605
Liabilities and shareholders' equity
Payables$2,584 $3,060
Short-term debt 1,429 1,583
Other current liabilities 821 797
Total current liabilities$4,834 $5,440
Long-term debt and leases 6,520 6,475
Other long-term liabilities 6,198 6,169
Shareholders' equity 10,324 9,521
Total liabilities and shareholders' equity$27,876 $27,605
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)_____