Homework answers / question archive / Here are simplified financial statements for Phone Corporation in a recent year:   INCOME STATEMENT(Figures in $ millions) Net sales $ 12,500 Cost of goods sold  3,710 Other expenses  4,112 Depreciation  2,308 Earnings before interest and taxes (EBIT) $2,370 Interest expense  650 Income before tax $1,720 Taxes (at 30%)  516 Net income $1,204 Dividends $806   BALANCE SHEET(Figures in $ millions)  End of Year  Start of Year Assets        Cash and marketable securities $82   $151  Receivables  2,032    2,350  Inventories  152    203  Other current assets  832    897  Total current assets $3,098   $3,601  Net property, plant, and equipment  19,903    19,845  Other long-term assets  4,146    3,700  Total assets $27,147   $27,146    Liabilities and shareholders' equity        Payables $2,494   $2,970  Short-term debt  1,384    1,538  Other current liabilities  776    752  Total current liabilities $4,654   $5,260  Long-term debt and leases  8,761    8,086  Other long-term liabilities  6,108    6,079  Shareholders' equity  7,624    7,721  Total liabilities and shareholders' equity $27,147   $27,146    Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year

Here are simplified financial statements for Phone Corporation in a recent year:   INCOME STATEMENT(Figures in $ millions) Net sales $ 12,500 Cost of goods sold  3,710 Other expenses  4,112 Depreciation  2,308 Earnings before interest and taxes (EBIT) $2,370 Interest expense  650 Income before tax $1,720 Taxes (at 30%)  516 Net income $1,204 Dividends $806   BALANCE SHEET(Figures in $ millions)  End of Year  Start of Year Assets        Cash and marketable securities $82   $151  Receivables  2,032    2,350  Inventories  152    203  Other current assets  832    897  Total current assets $3,098   $3,601  Net property, plant, and equipment  19,903    19,845  Other long-term assets  4,146    3,700  Total assets $27,147   $27,146    Liabilities and shareholders' equity        Payables $2,494   $2,970  Short-term debt  1,384    1,538  Other current liabilities  776    752  Total current liabilities $4,654   $5,260  Long-term debt and leases  8,761    8,086  Other long-term liabilities  6,108    6,079  Shareholders' equity  7,624    7,721  Total liabilities and shareholders' equity $27,147   $27,146    Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year

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

 

INCOME STATEMENT(Figures in $ millions)

Net sales $ 12,500

Cost of goods sold  3,710

Other expenses  4,112

Depreciation  2,308

Earnings before interest and taxes (EBIT) $2,370

Interest expense  650

Income before tax $1,720

Taxes (at 30%)  516

Net income $1,204

Dividends $806

 

BALANCE SHEET(Figures in $ millions)  End of Year  Start of Year

Assets       

Cash and marketable securities $82   $151 

Receivables  2,032    2,350 

Inventories  152    203 

Other current assets  832    897 

Total current assets $3,098   $3,601 

Net property, plant, and equipment  19,903    19,845 

Other long-term assets  4,146    3,700 

Total assets $27,147   $27,146 

 

Liabilities and shareholders' equity       

Payables $2,494   $2,970 

Short-term debt  1,384    1,538 

Other current liabilities  776    752 

Total current liabilities $4,654   $5,260 

Long-term debt and leases  8,761    8,086 

Other long-term liabilities  6,108    6,079 

Shareholders' equity  7,624    7,721 

Total liabilities and shareholders' equity $27,147   $27,146 

 

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.)

 

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. day in inventory (use average balance sheet figures)

e. inventory turnover (use average balance sheet figures)

f. average collection period (use start of yr bal sheet fig)

g. Operating profit margin

h. long term debt ratio (use end of year bal sheet)

I. total debt ratio (use of end of yr)

j. times interest earned

k. cash coverage ratio

l. current ratio (use end of yr)

m. quick ratio (use end of yr)