b. Use your computations from part a, aiung with measures in Exhibit 4.1 to estimate the hung-term debt rating for Nordstrom. Based on the above computations, the rating for Nordstrom's to ng-term debt would fall in the Aaa - Aa range 3 EXHIBIT 4.? Am ..... 12.2% 17.4 27.2% 25.1% 26.5 60.7% 47.4% 1.4 26.4% 1.4 9.3 A8 ...... 10.8% 16.1 20.3% 17.6% 19.4 49.3% 32.0% 1 .7 34.6% 1 .4 6.5 A ....... 11.3% 11.6 15.5% 14.5% 12.9 37.1% 28.396 2.1 39.5% 1.3 9.6 Baa ..... 6.7% 6.0 13.7% 12.5% 7.7 27.7% 25.0% 2.6 47.1 96 1 .3 10.? Ba ...... 6.0% 3.5 12.5% 11.296 5.6 20.5% 20.396 3.6 55.6% 1.2 14.1 B ....... 6.6% 1.6 10.7% 8.7% 2.8 11.9% 10.7% 5.1 69.2 96 1 .1 16.2 (Pm-C. . . 1.4% 0.4 2.9% 2.1 96 1.5 3.6% 4.0% 7.1 993% 9.6 22.8 \"Table reporle July 2016 median vaiuee: from Home Firianoiai Mattias\" Key Ratios ByangAnd indium For North American Nonbnancia.' Corporab'ane: Report dated September 2018 [Excel Data Supplement] EBITNAW Meets BEII'I'NAvamga of omentand Preuime Year Amie Emmet\" Expense EBl'l'Nlnterest Expense EEHTA Mnrg'n EBI'EMNet Hm Operelhg Margin Operating Prom Revenue H0+mEmylnueelExp [FundeFromOpantbrieHntareetExpenaaMeraetExpenee FFQ'Deb'i Find: From Wort-Tenn Debt + Long-Term Debt} Retail'edCeethowJNetDebt tFFOPmmmmmnmHWWMM+Lmu-'I'umDebtCemSlut-hnblarkmm W (Short-1km Debt + Long-Term DabtyEBlTA DebmookCepitalizeon (StutTamDebt+an'lbamDeW[SlmTamnebt+ngmnnmu+meumdeimediameiee+Nmoumemm+Bookn CAPEXI'Depreeiation Exp Ghee expendtueetnr plan! and equipment and intangible aeeeteperlhe statement ofoaeh nwDepreciaiion Expense emraebblatility Averagerevenueoirerveyeaedividedbythemmdarddeationofrevenueiortheteemeperiod where: EBI'IA - Earnhge from continuing operations before interest. taxes. and amortization EBiTDA .... Earnings from continuing operations before interest and tame. depreciation. and anontizatlon FFO =Fu1dsfrom operations: Cashflowfrom operations beforeoimgee 'nwork'ng oapitalmdohmges in othershori-ten'n and long-term opaaiing assets and liabilities {$ millions]. Sales $151539 Depreciation expense 591 Tax expense 4D? Interest expense, gross 134 Earnings from continuing operations {Net income} 7'66 EBITA 113]\"6 Cash F525 Ave rage total assets 9,916 Total debt 310D}? No ncu rrent deferred tax liabilities 459 Noncontrolling interest [1 Equity ETI Dividends paid 1,135 Cash from operating activities 1451 a. Compute the following seven Moody's metrics for Nordstrom. See Appendix 4A for denitions. Round answers to one decimal place {example for percentage answers: 0.2345 = 23.5%]. Ilatlll 2016 EElTA to average asseis D 'iil Operating margin D iiil EE-ITA margin D 9E EBlTA interest coverage [1 Debt to EBITDA [1 Debt to book capitalization ii] iii": Retained cash flow to net debt [1
