Score: 0 of 1 pt 8 of 10 (7 complete) HW Score: 60.82%, 6.08 of 10 pts S12-8 (book/static) Question Help 0 The financial statements of Metro Corporation follow: (Click the icon to view the assets section of the balance sheet.) 1. Calculate the company's debt ratio at December 31, 2018. 2. Calculate the company's times-interest-earned ratio for 2018. For operating income, use income from operations. 3. Is Metro's ability to pay liabilities and interest expense strong or weak? Comment on the value of each ratio calculated for questions 1 and 2. (Click the icon to view the liabilities and stockholders' equity sections of the balance sheet.) (Click the icon to view the income statement.) 1. Calculate the company's debt ratio at December 31, 2018. Select the formula and then enter the amounts to calculate the debt ratio. (Enter currency amounts in millions as given in the question. Enter the debt ratio as a decimal to two places. X.XX.) Debt ratio Balance Sheets (Adapted) December 31, 2018 and 2017 Increase (Decrease) Amount Percentage 2018 2017 (Dollar amounts in millions) Assets Current assets: Cash and cash equivalents $ 1,210 $ 980 $ 230 23.5 % Short-term investments 14 48 (34) (38) (70.8) (14.2) Receivables, net 230 268 Inventories 102 70 32 45.7 292 302 Prepaid expenses and other assets (10) (3.3) 1,848 Total current assets 1,668 180 10.8 3,660 3,386 274 8.1 Property, plant, and equipment, net Intangible assets 1,020 848 172 20.3 826 730 96 Other assets 13.2 $ 7,354 $ 6,632 $ 722 Total assets 10.9 % Liabilities and STOCKnolders Equity Current liabilities: $ 966 $ 860 $ 106 12.3 % Accounts payable Income tax payable 42 66 (24) (36.4) Short-term debt 128 116 12 10.3 66 68 Other (2) (2.9) Total current liabilities 1,202 1,110 92 8.3 Long-term debt 678 22.8 3,648 1,128 2,970 1,096 32 Other liabilities 2.9 5,978 Total liabilities 5,176 802 15.5 Stockholders' equity: Common stock 2 2 Retained earnings (6.5) 1,534 (160) 1,640 (186) (106) 26 Accumulated other comprehensive (loss) 14.0 Total stockholders' equity 1,376 1,456 (80) (5.5) 7,354 $ 6,632 $ 722 Total liabilities and stockholders' equity 10.9 % 2017 Metro Corporation Statements of Income (Adapted) Year Ended December 31, 2018 and 2017 (Dollar amounts in millions) 2018 Net revenues $ 9,500 $ 4,589 Cost of goods sold Gross profit 4,911 3,607 General and administrative expenses 9,319 4,851 4,468 3,456 Income from operations 1,012 1,304 204 Interest expense, net 178 Income before income taxes 1,100 834 389 251 Provision for income taxes $ 711 $ 583 Net income Print Done