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Problem 4-7 Financial Ratios (LO3) Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales
Problem 4-7 Financial Ratios (LO3)
Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT | ||
(Figures in $ millions) | ||
Net sales | $ | 12,600 |
Cost of goods sold | 3,760 | |
Other expenses | 4,127 | |
Depreciation | 2,338 | |
Earnings before interest and taxes (EBIT) | $ | 2,375 |
Interest expense | 655 | |
Income before tax | $ | 1,720 |
Taxes (at 35%) | 602 | |
Net income | $ | 1,118 |
Dividends | $ | 816 |
BALANCE SHEET | |||||||
(Figures in $ millions) | |||||||
End of Year | Start of Year | ||||||
Assets | |||||||
Cash and marketable securities | $ | 83 | $ | 152 | |||
Receivables | 2,082 | 2,370 | |||||
Inventories | 157 | 208 | |||||
Other current assets | 837 | 902 | |||||
Total current assets | $ | 3,159 | $ | 3,632 | |||
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 | $ | 2,980 | |||
Short-term debt | 1,389 | 1,543 | |||||
Other current liabilities | 781 | 757 | |||||
Total current liabilities | $ | 4,674 | $ | 5,280 | |||
Long-term debt and leases | 8,512 | 7,907 | |||||
Other long-term liabilities | 6,118 | 6,089 | |||||
Shareholders equity | 7,924 | 7,921 | |||||
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 final answers to 2 decimal places.)
Inventory turnover
Average collection period
Operating profit margin
Long term debt ratio
Total debt ratio
Times interest earned
Cash coverage ratio
Current ratio
Quick ratio
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