Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Other

Here are simplified financial statements for Phone Corporation in a recent year:

image text in transcribedimage text in transcribed

INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 30%) Net income Dividends $ 12,200 3,560 4,037 2,218 $ 2,385 635 $ 1,750 525 $ 1,225 $ 746 BALANCE SHEET (Figures in $ millions) End of Year Start of Year $ $ 79 1,882 137 817 2,915 19,873 4,116 $ 26,904 $ 148 2,290 188 882 $ 3,508 19,815 3,670 $ 26,993 Assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Net property, plant, and equipment Other long-term assets Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity $ 2,464 1,369 761 $ 4,594 9,508 6,078 6,724 $ 26,904 $ 2,940 1,523 737 $ 5,200 8,623 6,049 7,121 $ 26,993 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.) 14.35% % % days 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) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) 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 I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) days %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Legal Aspects Of Trade Finance

Authors: Charles Chatterjee

1st Edition

1857433890, 978-1857433890

More Books

Students also viewed these Finance questions

Question

How is the education level required for a position established?

Answered: 1 week ago