Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,100 Cost of goods sold 4,010 Other expenses 4,042 Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax 2,488 $ 2,560 680 Taxes (at 21%) $ 1,880 395 Net income Dividends $ 1,485 $ 866 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Net property, plant, and equipment Other long-term assets Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity Calculate the following financial ratios for Phone Corporation: $ 88 2,332 182 862 $ 3,464 19,963 4,206 $ 27,633 $ 2,554 1,414 806 $ 4,774 $ 157 2,470 233 927 $ 3,787 19,905 3,760 $ 27,452 $ 3,030 1,568 782 $ 5,380 7,267 7,012 6,168 6,139 9,424 8,921 $ 27,633 $ 27,452 Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. Answer is not complete. 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. Days in inventory (use start-of-year balance sheet figures) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) j. Times interest earned k. Cash coverage ratio I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) 17.21 16.19 % 5.39 % % 21.00 days 69.00 days 19.54 × % 0.49 X 0.66 ✓ 3.76 ✓ 0.13 x 0.73 0.69 x
Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,100 Cost of goods sold 4,010 Other expenses 4,042 Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax 2,488 $ 2,560 680 Taxes (at 21%) $ 1,880 395 Net income Dividends $ 1,485 $ 866 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Net property, plant, and equipment Other long-term assets Total assets Liabilities and shareholders' equity Payables Short-term debt Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity Calculate the following financial ratios for Phone Corporation: $ 88 2,332 182 862 $ 3,464 19,963 4,206 $ 27,633 $ 2,554 1,414 806 $ 4,774 $ 157 2,470 233 927 $ 3,787 19,905 3,760 $ 27,452 $ 3,030 1,568 782 $ 5,380 7,267 7,012 6,168 6,139 9,424 8,921 $ 27,633 $ 27,452 Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. Answer is not complete. 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. Days in inventory (use start-of-year balance sheet figures) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) j. Times interest earned k. Cash coverage ratio I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) 17.21 16.19 % 5.39 % % 21.00 days 69.00 days 19.54 × % 0.49 X 0.66 ✓ 3.76 ✓ 0.13 x 0.73 0.69 x
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Here are simplified financial statements for Phone Corporation in 2020:
INCOME STATEMENT
(Figures in $ millions)
Net sales
$ 13,100
Cost of goods sold
4,010
Other expenses
4,042
Depreciation
Earnings before interest and taxes (EBIT)
Interest expense
Income before tax
2,488
$ 2,560
680
Taxes (at 21%)
$ 1,880
395
Net income
Dividends
$ 1,485
$ 866
BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Cash and marketable securities
Receivables
Inventories
Other current assets
Total current assets
Net property, plant, and equipment
Other long-term assets
Total assets
Liabilities and shareholders' equity
Payables
Short-term debt
Other current liabilities
Total current liabilities
Long-term debt and leases
Other long-term liabilities
Shareholders' equity
Total liabilities and shareholders' equity
Calculate the following financial ratios for Phone Corporation:
$ 88
2,332
182
862
$ 3,464
19,963
4,206
$ 27,633
$ 2,554
1,414
806
$ 4,774
$ 157
2,470
233
927
$ 3,787
19,905
3,760
$ 27,452
$ 3,030
1,568
782
$ 5,380
7,267
7,012
6,168
6,139
9,424
8,921
$ 27,633
$ 27,452
Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.
Answer is not complete.
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. Days in inventory (use start-of-year balance sheet figures)
e. Inventory turnover (use start-of-year balance sheet figures)
f. Average collection period (use start-of-year balance sheet figures)
g. Operating profit margin
h. Long-term debt ratio (use end-of-year balance sheet figures)
i. Total debt ratio (use end-of-year balance sheet figures)
j. Times interest earned
k. Cash coverage ratio
I. Current ratio (use end-of-year balance sheet figures)
m. Quick ratio (use end-of-year balance sheet figures)
17.21
16.19 %
5.39 %
%
21.00 days
69.00
days
19.54 × %
0.49 X
0.66 ✓
3.76 ✓
0.13 x
0.73
0.69 x
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