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Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,200 Cost of goods
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT | ||
(Figures in $ millions) | ||
Net sales | $ | 13,200 |
Cost of goods sold | 4,110 | |
Other expenses | 4,072 | |
Depreciation | 2,548 | |
Earnings before interest and taxes (EBIT) | $ | 2,470 |
Interest expense | 690 | |
Income before tax | $ | 1,780 |
Taxes (at 35%) | 623 | |
Net income | $ | 1,157 |
Dividends | $ | 866 |
BALANCE SHEET | |||||||
(Figures in $ millions) | |||||||
End of Year | Start of Year | ||||||
Assets | |||||||
Cash and marketable securities | $ | 90 | $ | 159 | |||
Receivables | 2,432 | 2,510 | |||||
Inventories | 192 | 243 | |||||
Other current assets | 872 | 937 | |||||
Total current assets | $ | 3,586 | $ | 3,849 | |||
Net property, plant, and equipment | 19,983 | 19,925 | |||||
Other long-term assets | 4,226 | 3,780 | |||||
Total assets | $ | 27,795 | $ | 27,554 | |||
Liabilities and shareholders equity | |||||||
Payables | $ | 2,574 | $ | 3,050 | |||
Short-term debt | 1,424 | 1,578 | |||||
Other current liabilities | 816 | 792 | |||||
Total current liabilities | $ | 4,814 | $ | 5,420 | |||
Long-term debt and leases | 6,769 | 6,654 | |||||
Other long-term liabilities | 6,188 | 6,159 | |||||
Shareholders equity | 10,024 | 9,321 | |||||
Total liabilities and shareholders equity | $ | 27,795 | $ | 27,554 | |||
Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.)
a. | Return on equity (use average balance sheet figures) | % | |
b. | Return on assets (use average balance sheet figures) | % | |
c. | Return on capital (use average balance sheet figures) | % | |
d. | Days in inventory (use start-of-year balance sheet figures) | days | |
e. | Inventory turnover (use start-of-year balance sheet figures) | ||
f. | Average collection period (use start-of-year balance sheet figures) | days | |
g. | Operating profit margin | % | |
h. | Long-term debt ratio (use end-of-year balance sheet figures) | ||
i. | Total debt ratio (use end-of-year balance sheet figures) | ||
j. | Times interest earned | ||
k. | Cash coverage ratio | ||
l. | Current ratio (use end-of-year balance sheet figures) | ||
m. | Quick ratio (use end-of-year balance sheet figures) |
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