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Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions). Revenue $13,954 Earnings from continuing

Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions).

Revenue $13,954

Earnings from continuing operations

$752
Interest expense 266

Capital expenditures (CAPEX)

553
Tax expense 258

Total debt

7,257
Amortization expense 8

Average assets

15,711
Depreciation expense 526

a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/Interest expenses, Debt/EBITDA, CAPEX/Depreciation Expense.

b. Using the ratios calculated in part a., estimate the credit rating that Moody's might assign to Kellogg. Refer to Exhibit 7.6 in the textbook for ratio definitions and credit ratings. Round answers to one decimal place (percentage ex: 0.2345 = 23.5%)

Ratio Moody's rating
EBITA/Avg. assets Answer

%
AnswerAaaAaABaaBaBCaaCaC

EBITA margin Answer

%
AnswerAaaAaABaaBaBCaaCaC

EBITA/Int. expense Answer

AnswerAaaAaABaaBaBCaaCaC

Debt/EBITDA Answer

AnswerAaaAaABaaBaBCaaCaC

CAPEX/Dep. expense Answer

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