Prepare a common-size balance sheet for Phone Corp. using its balance sheet from problem 1.

Data from in Problem 1

Here are simplified financial statements of Phone Corporation from a recent year:

Calculate the following financial ratios:

a. Long-term debt ratio

b. Total debt ratio

c. Times interest earned

d. Cash coverage ratio

e. Current ratio

f. Quick ratio g. Net profit margin h. Inventory turnover i. Days in inventory j. Average collection period k. Return on equity l. Return on assets m. Payout ratio

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INCOME STATEMENT (figures in millions of dollars) Net sales 13,194 Cost of goods sold 4,060 Other expenses 4,049 Depreciation 2,518 Earnings before interest and taxes (EBIT) 2,566 Interest expenses 685 Income before tax 1,881 Taxes 570 Net income 1,311 Dividends 856