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Calculate the following financial ratios for Phone Corporation: Note: 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 I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % 19.97 days 18.27 68.62 days % 0.53 0.72 3.65 7.19 0.67 0.45 Here are simplified financial statements for Phone Corporation in 2020: 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) Interest expense Income before tax $ 2,370 650 $ 1,720 Taxes (at 21%) 361 Net income Dividends BALANCE SHEET $ 1,359 $ 806 (Figures in $ millions) 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 End of Year Start of Year $ 82 2,032 $ 151 2,350 203 897 152 832 $ 3,098 19,903 4,146 $ 3,601 19,845 3,700 $ 27,147 $ 27,146 $ 2,494 1,384 776 $ 4,654 $ 2,970 1,538 752 $ 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: Note: 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 I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % 19.97 days 18.27 68.62 days % 0.53 0.72 3.65 7.19 0.67 0.45 Here are simplified financial statements for Phone Corporation in 2020: 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) Interest expense Income before tax $ 2,370 650 $ 1,720 Taxes (at 21%) 361 Net income Dividends BALANCE SHEET $ 1,359 $ 806 (Figures in $ millions) 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 End of Year Start of Year $ 82 2,032 $ 151 2,350 203 897 152 832 $ 3,098 19,903 4,146 $ 3,601 19,845 3,700 $ 27,147 $ 27,146 $ 2,494 1,384 776 $ 4,654 $ 2,970 1,538 752 $ 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Here are simplified financial statements for Phone Corporation in 2020: Calculate the following financial ratios for Phone Corporation:  

Calculate the following financial ratios for Phone Corporation: Note: 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 I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % 19.97 days 18.27 68.62 days % 0.53 0.72 3.65 7.19 0.67 0.45
Transcribed Image Text:Calculate the following financial ratios for Phone Corporation: Note: 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 I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) % % % 19.97 days 18.27 68.62 days % 0.53 0.72 3.65 7.19 0.67 0.45
Here are simplified financial statements for Phone Corporation in 2020: 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) Interest expense Income before tax $ 2,370 650 $ 1,720 Taxes (at 21%) 361 Net income Dividends BALANCE SHEET $ 1,359 $ 806 (Figures in $ millions) 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 End of Year Start of Year $ 82 2,032 $ 151 2,350 203 897 152 832 $ 3,098 19,903 4,146 $ 3,601 19,845 3,700 $ 27,147 $ 27,146 $ 2,494 1,384 776 $ 4,654 $ 2,970 1,538 752 $ 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
Transcribed Image Text:Here are simplified financial statements for Phone Corporation in 2020: 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) Interest expense Income before tax $ 2,370 650 $ 1,720 Taxes (at 21%) 361 Net income Dividends BALANCE SHEET $ 1,359 $ 806 (Figures in $ millions) 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 End of Year Start of Year $ 82 2,032 $ 151 2,350 203 897 152 832 $ 3,098 19,903 4,146 $ 3,601 19,845 3,700 $ 27,147 $ 27,146 $ 2,494 1,384 776 $ 4,654 $ 2,970 1,538 752 $ 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
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