Discuss a restructuring charge

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Reference no: EM131715109

On December 15, 2016, Alcatel-Lucent, a telecommunications company, established a restructuring charge of $400 million, of which $120 million was for severance pay for workers who will be terminated immediately (deductible from US taxes when actually paid) and $280 million was for the write down of assets on December 15, 2016.

What is the impact of this accounting change on the following ratios for 2016 and 2017?

Please explain.

1. Operating Cash Flow/Sales:

2. Net Income/Sales:

3. Sales/Net Fixed Assets:

Reference no: EM131715109

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