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).

Revenue$13,601Interest expense, gross$181Depreciation expense306Dividends, including to noncontrolling interest717Amortization expense417Cash and cash equivalents3,616Operating profit (EBIT)2,537Marketable securities83Total debt9,859Average assets24,713Cash from operating activities2,610CAPEX572Funds from operations2,852

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%).

RatioDebt / EBITDA

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