Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 12,300 Cost of goods sold 3,610 Other expenses 4,022 Depreciation 2,248 Earnings before interest and taxes (EBIT) $ 2,420 Interest expense 640 Income before tax $ 1,780 Taxes (at 21%) 374 Net income $ 1,406 Dividends $ 756 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 80 $ 149 Receivables 1,932 2,310 Inventories 142 193 Other current assets 822 887 Total current assets $ 2,976 $ 3,539 Net property, plant, and equipment 19,883 19,825 Other long-term assets 4,126 3,680 Total assets $ 26,985 $ 27,044 Liabilities and shareholders’ equity Payables $ 2,474 $ 2,950 Short-term debt 1,374 1,528 Other current liabilities 766 742 Total current liabilities $ 4,614 $ 5,220 Long-term debt and leases 9,259 8,444 Other long-term liabilities 6,088 6,059 Shareholders’ equity 7,024 7,321 Total liabilities and shareholders’ equity $ 26,985 $ 27,044 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. 1. Times interest earned................... 2. Cash coverage ratio..................... 3. Current ratio (Use end-of-year balance sheet figure)............. 4. Quick ratio (Use end-of-year balance sheet figure).............
Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 12,300 Cost of goods sold 3,610 Other expenses 4,022 Depreciation 2,248 Earnings before interest and taxes (EBIT) $ 2,420 Interest expense 640 Income before tax $ 1,780 Taxes (at 21%) 374 Net income $ 1,406 Dividends $ 756 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 80 $ 149 Receivables 1,932 2,310 Inventories 142 193 Other current assets 822 887 Total current assets $ 2,976 $ 3,539 Net property, plant, and equipment 19,883 19,825 Other long-term assets 4,126 3,680 Total assets $ 26,985 $ 27,044 Liabilities and shareholders’ equity Payables $ 2,474 $ 2,950 Short-term debt 1,374 1,528 Other current liabilities 766 742 Total current liabilities $ 4,614 $ 5,220 Long-term debt and leases 9,259 8,444 Other long-term liabilities 6,088 6,059 Shareholders’ equity 7,024 7,321 Total liabilities and shareholders’ equity $ 26,985 $ 27,044 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. 1. Times interest earned................... 2. Cash coverage ratio..................... 3. Current ratio (Use end-of-year balance sheet figure)............. 4. Quick ratio (Use end-of-year balance sheet figure).............
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 4PB
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Here are simplified financial statements for Phone Corporation in 2020:
INCOME STATEMENT | |
(Figures in $ millions) | |
Net sales | $ 12,300 |
---|---|
Cost of goods sold | 3,610 |
Other expenses | 4,022 |
2,248 | |
Earnings before interest and taxes (EBIT) | $ 2,420 |
Interest expense | 640 |
Income before tax | $ 1,780 |
Taxes (at 21%) | 374 |
Net income | $ 1,406 |
Dividends | $ 756 |
BALANCE SHEET | ||
(Figures in $ millions) | ||
End of Year | Start of Year | |
---|---|---|
Assets | ||
Cash and marketable securities | $ 80 | $ 149 |
Receivables | 1,932 | 2,310 |
Inventories | 142 | 193 |
Other current assets | 822 | 887 |
Total current assets | $ 2,976 | $ 3,539 |
Net property, plant, and equipment | 19,883 | 19,825 |
Other long-term assets | 4,126 | 3,680 |
Total assets | $ 26,985 | $ 27,044 |
Liabilities and shareholders’ equity | ||
Payables | $ 2,474 | $ 2,950 |
Short-term debt | 1,374 | 1,528 |
Other current liabilities | 766 | 742 |
Total current liabilities | $ 4,614 | $ 5,220 |
Long-term debt and leases | 9,259 | 8,444 |
Other long-term liabilities | 6,088 | 6,059 |
Shareholders’ equity | 7,024 | 7,321 |
Total liabilities and shareholders’ equity | $ 26,985 | $ 27,044 |
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.
1. Times interest earned...................
2. Cash coverage ratio.....................
3.
4. Quick ratio (Use end-of-year balance sheet figure).............
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