Assigning a Long-Term Debt Rating Using Financial Ratios

Refer to the information below from Nordstrom Inc.s 2016 financial statements. Use the information to answer the requirements ($ millions).

Sales					$16,983
Depreciation expense					626
Tax expense					442
Interest expense, gross					219
Earnings from continuing operations (Net income)					896
EBITA					1,611
Cash					661
Average total assets					11,360
Total debt					3,167
Noncurrent deferred tax liabilities					554
Noncontrolling interest					0
Equity					871
Dividends paid					1,185
Cash from operating activities					2,451

a. Compute the following seven Moodys metrics for Nordstrom. See Appendix 4A for definitions.

Round answers to one decimal place (example for percentage answers: 0.2345 = 23.5%).

Ratio			2016
EBITA to average assets			Answer %
Operating margin			Answer %
EBITA margin			Answer %
EBITA interest coverage			Answer
Debt to EBITDA			Answer
Debt to book capitalization			Answer %
Retained cash flow to net debt			Answer %