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Here are simplified financial statements of Phone Corporation from a recent year: INCOME STATEMENT (Figures in millions of dollars) Net sales 12,800 Cost of goods
Here are simplified financial statements of Phone Corporation from a recent year: |
INCOME STATEMENT (Figures in millions of dollars) | |
Net sales | 12,800 |
Cost of goods sold | 3,860 |
Other expenses | 4,127 |
Depreciation | 2,398 |
Earnings before interest and taxes (EBIT) | 2,415 |
Interest expense | 665 |
Income before tax | 1,750 |
Taxes (at 30%) | 525 |
Net income | 1,225 |
Dividends | 836 |
BALANCE SHEET (Figures in millions of dollars) | ||
End of Year | Start of Year | |
Assets | ||
Cash and marketable securities | 85 | 154 |
Receivables | 2,182 | 2,410 |
Inventories | 167 | 218 |
Other current assets | 847 | 912 |
Total current assets | 3,281 | 3,694 |
Net property, plant, and equipment | 19,933 | 19,875 |
Other long-term assets | 4,176 | 3,730 |
Total assets | 27,390 | 27,299 |
Liabilities and shareholders equity | ||
Payables | 2,524 | 3,000 |
Short-term debt | 1,399 | 1,553 |
Other current liabilities | 791 | 767 |
Total current liabilities | 4,714 | 5,320 |
Long-term debt and leases | 8,014 | 7,549 |
Other long-term liabilities | 6,138 | 6,109 |
Shareholders equity | 8,524 | 8,321 |
Total liabilities and shareholders equity | 27,390 | 27,299 |
Phone Corp.s stock price was $80 at the end of the year. There were 201 million shares outstanding. |
a. | What was the companys market capitalization and market value added? (Enter your answers in billions rounded to 2 decimal places.) |
Market capitalization | $ billion |
Market value added | $ billion |
b. | What was its market-to-book ratio? (Round your answer to 2 decimal places.) |
Market-to-book ratio |
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