Here are simplified financial statements for Phone Corporation in a recent year:INCOME STATEMENT(Figures in $ millions)$ 13,3004,1604,087Net salesCost of goods soldOther expensesDepreciationEarnings before interest and taxes (EBIT)Interest expense2,578$ 2,475695$ 1,780534Income before taxТахes (at 30%)Net income$ 1,246Dividends$876BALANCE SHEET(Figures in $ millions)End ofStart ofYearYearAssetsCash and marketable securities$2,482$2,53091160ReceivablesInventories197248Other current assets877942$$3,88019,9353,790Total current assetsNet property, plant, and equipmentOther long-term assets3,64719,9934,236Total assets$ 27,876$ 27,605Liabilities and shareholders' equityPayables$2,584$3,0601,583Short-term debt1,429Other current liabilities821797$ 4,8346,5206,19810,3245,4406,4756,1699,521Total current liabilities$Long-term debt and leasesOther long-term liabilitiesShareholders' equityTotal liabilities and shareholders' equity$ 27,876$ 27,605 Total liabilities and shareholders' equity$ 27,876$ 27,60526Calculate 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. Days in inventory (use start-of-year balance sheet figures)e. Inventory turnover (use start-of-year balance sheet figures)daysf. Average collection period (use start-of-year balance sheet figures)daysg. Operating profit marginh. 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 earnedk. Cash coverage ratio1. Current ratio (use end-of-year balance sheet figures)m. Quick ratio (use end-of-year balance sheet figures)

Ratio is the relationship between two items of the financial statements. Financial Ratios help the…

26 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. 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 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % days days %

26 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. 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 1. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % days days %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 13E: Ratio of liabilities to stockholders equity and times interest earned The following data were taken...

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