Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet and income statement information from Verizon Communications, Inc., follows (in millions). 2017 2016 Current assets $29,913 $26,395 Current liabilities 33,037 30,340 Total liabilities 212,456 220,148 Equity 43,096 22,524 Earnings before interest and taxes 25,327 25,362 Interest expense 4,733 4,376 Net cash flow from operating activities 25,305 22,810 a. Compute the current ratio for each year. Round answers to two decimal places. 2017 Answer 0.91 2016 Answer 0.87 b. Compute times interest earned (TIE), the debt-to-equity (D/E), and the operating cash flow to current liabilities (OCFCL) ratios for each year. (In 2015, current liabilities totaled $35,052 million.) Round answers to two decimal places. When applicable, do not round until your final answer. 2017 2016 TIE Answer 5.35 Answer 5.8 D/E Answer 3.93 Answer 8.77 OCFCL Answer 0.77 Answer 0.75

Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet and income statement information from Verizon Communications, Inc., follows (in millions). 2017 2016 Current assets $29,913 $26,395 Current liabilities 33,037 30,340 Total liabilities 212,456 220,148 Equity 43,096 22,524 Earnings before interest and taxes 25,327 25,362 Interest expense 4,733 4,376 Net cash flow from operating activities 25,305 22,810 a. Compute the current ratio for each year. Round answers to two decimal places. 2017 0.91 2016 0.87 b. Compute times interest earned (TIE), the debt-to-equity (D/E), and the operating cash flow to current liabilities (OCFCL) ratios for each year. (In 2015, current liabilities totaled $35,052 million.) Round answers to two decimal places. When applicable, do not round until your final answer. 2017 2016 TIE 5.35 5.8 D/E 3.93 x 8.77 X OCFCL 0.77 X 0.75 x