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					$15,208
Depreciation expense					584
Tax expense					400
Interest expense, gross					177
Earnings from continuing operations (Net income)					736
EBITA					1,325
Cash					619
Average total assets					9,585
Total debt					2,965
Noncurrent deferred tax liabilities					436
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%).

Operating margin =

Retained cash flow to net debt =