E4-22. Assigning a Long-Term Debt Rating Using Financial Ratios Refer to the information below from Stryker 's 2018 financial statements. Use the information to answer the requirements($ millions).
Revenue ... . .......... . ...... $13,601 Interest expense, gross . . . . . . . . . . . . . . . . . . . . $ 181 717 3,616 83 24,713 572 Depreciation expense. . . . . . . . . . . 306 Dividends, including to noncontrolling interest . . .
Amortization expense. . . . . . . . . . . 417 Cash and cash equivalents ...... . .. . ...... .
Operating profit (EBIT) . . . . . . . . . . 2,537 Marketable securities .... . .... . .. . .... . ... .
Total debt. . . . . . . . . . . . . . . . . . . . 9,859 Average assets ... . ....... . .. . . . . .... . ... .
Cash from operating activities . . . . 2,61 O CAPEX ......... . .. . .... • .. . .. . .... . .. . .
Funds from operations . . . . . . . . . . 2,852 Required

a. Compute the following I 0 Moody's metrics for Stryker for 201 8.
1. Debt/EBITDA 6. Operating margin 2. EBITA to interest expense 7. Funds From Operations/Debt 3. Revenue 8. (Funds From Operations + Interest Expense)/lnterest Expense 4. Retained Cash Flow/Net Debt 9. EBITA to average assets 5. EBIT A margin 10. CAPEX/Depreciation expense

b. Use your computations from part

a, along with measures in Exhibit 4.8, to estimate the long-term debt rating for Stryker.