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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
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). $13,601 Interest expense, gross Revenue $181 Depreciation expense 306 Dividends, including to noncontrolling interest 717 Amortization expense 417 Cash and cash equivalents 3,616 Operating profit (EBIT) 2,537 Marketable securities 83 Total debt 9,859 Average assets 24,713 Cash from operating activities Funds from operations 2,610 CAPEX 2,852 572 a. Compute the following 10 Moody's metrics for Stryker for 2018. Round all answers (except Revenue) to one decimal place (example for percentage ratios: 0.2345 = 23.5%). Debt/EBITDA Ratio EBITA to interest expense Revenue ($ millions) $ Retained Cash Flow / Net Debt % EBITA margin % Operating margin FFO / Debt (FFO+Interest Expense)/Interest Expense EBITA to average assets 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. Based on the above computations, the rating for Stryker's long-term debt would fall in the
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