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Compute and Interpret Coverage, Liquidity and Solvency Ratios Selected balance sheet and income statement information from Amazon for 2016 through 2018 follows. $ millions 2018
Compute and Interpret Coverage, Liquidity and Solvency Ratios Selected balance sheet and income statement information from Amazon for 2016 through 2018 follows. $ millions 2018 2017 2016 Net operating profit after tax (NOPAT). Net income.. Operating profit. Interest expense. Cash from operating activities Current assets Current liabilities. Cash and cash equivalents Marketable securities Total debt. Assets. Liabilities. Equity Net operating assets (NOA) $ 10,978 $ 3,222 $ 2,556 10,073 3,033 2,371 12,421 4,106 4,186 1,417 848 484 30,723 18,365 17,203 75, 101 60,197 45,781 68,391 57,883 43,816 31,750 20,522 19,334 9,500 10,464 6,647 23,495 24,743 7,694 162,648 131,310 83,402 119,099 103,601 64,117 43,549 27,709 19,285 25,794 21,466 998 Required a. Compute profitability measures RNOA and ROE for 2018 and 2017. In which year are the measures stronger? b. Compute coverage metrics Times interest earned and Cash from operating activities to total debt for 2018 and 2017. Discuss any trends observed. c. Determine liquidity for the company for 2018 and 2017 by computing the current ratio and quick ratio. Is the company sufficiently liquid? Explain. What additional information about the accounting numbers that make up this ratio might be useful in helping us assess liquidity? Explain. d. Compute the Total liabilities-to-equity ratio and the Total debt to equity ratio for 2018 and 2017. Discuss any changes observed for each. e. What is the overall assessment of the company's credit risk from the analyses in parts a through d
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