Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Money and Finance

Authors: Michael Melvin, Stefan C. Norrbin

8th edition

978-8131234136, 123852471, 978-0123852472

More Books

Students also viewed these Finance questions