INCOME STATEMENT

(Figures in $ millions)

Net sales

$ 12600

Cost of goods sold

3760

Other expenses

4127

Depreciation

2338

Earnings before interest and taxes (EBIT)

$ 2375

Interest expense

655

Income before tax

$ 1720

Taxes (at 30%)

602

Net income

$ 1118

Dividends

$ 816

BALANCE SHEET

(Figures in $ millions)

End of Year

Start of Year

Assets

Cash and marketable securities

$

83

$

152

Receivables

2082

2370

Inventories

157

208

Other current assets

837

902

Total current assets

$

3159

$

3632

Net property, plant, and equipment

19,913

19,855

Other long-term assets

4,156

3,710

Total assets

$

27,228

$

27,197

Liabilities and shareholders' equity

Payables

$

2,504

$

2980

Short-term debt

1,389

1,543

Other current liabilities

781

757

Total current liabilities

$

4,674

$

5,280

Long-term debt and leases

8512

7,191

Other long-term liabilities

6,118

6089

Shareholders' equity

7924

7921

Total liabilities and shareholders' equity

$

27,228

$

27,197

Calculate the following financial ratios for Phone Corporation:(Use 365 days in a year. Do not round intermediate calculations.Round your percentage answers "Return on equity", "Return on assets", Return on capital" and "Operating profit margin" to 2 decimal places and the rest to 2 decimal places.)

a.

Return on equity (Use average equity.)

%

b.

Return on assets (Use after-tax operating income and average assets.)

%

c.

Return on capital (Use after-tax operating income and average capital.)

%

d.

Days in inventory (Use beginning inventory.)

days

e.

Inventory turnover (Use beginning inventory.)

f.

Average collection period (Use beginning receivables.)

days

g.

Operating profit margin (Use after-tax operating income.)

%

h.

Long-term debt ratio (Use end of year values.)

i.

Total debt ratio (Use end of year values.)

j.

Times interest earned

k.

Cash coverage ratio

l.

Current ratio (Use end of year values.)

m.

Quick ratio (Use end of year values.)