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Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,600 Cost of goods
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT | ||
(Figures in $ millions) | ||
Net sales | $ | 13,600 |
Cost of goods sold | 4,310 | |
Other expenses | 4,162 | |
Depreciation | 2,668 | |
Earnings before interest and taxes (EBIT) | $ | 2,460 |
Interest expense | 710 | |
Income before tax | $ | 1,750 |
Taxes (at 30%) | 525 | |
Net income | $ | 1,225 |
Dividends | $ | 906 |
BALANCE SHEET | |||||||
(Figures in $ millions) | |||||||
End of Year | Start of Year | ||||||
Assets | |||||||
Cash and marketable securities | $ | 94 | $ | 163 | |||
Receivables | 2,632 | 2,590 | |||||
Inventories | 212 | 263 | |||||
Other current assets | 892 | 957 | |||||
Total current assets | $ | 3,830 | $ | 3,973 | |||
Net property, plant, and equipment | 20,023 | 19,965 | |||||
Other long-term assets | 4,266 | 3,820 | |||||
Total assets | $ | 28,119 | $ | 27,758 | |||
Liabilities and shareholders equity | |||||||
Payables | $ | 2,614 | $ | 3,090 | |||
Short-term debt | 1,444 | 1,598 | |||||
Other current liabilities | 836 | 812 | |||||
Total current liabilities | $ | 4,894 | $ | 5,500 | |||
Long-term debt and leases | 5,773 | 5,938 | |||||
Other long-term liabilities | 6,228 | 6,199 | |||||
Shareholders equity | 11,224 | 10,121 | |||||
Total liabilities and shareholders equity | $ | 28,119 | $ | 27,758 | |||
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.)
f. Average collection period (use start-of-year balance sheet figures) _______ days
g. Operating profit margin _______ %
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