Cengagenowv2, 1 Term Printed Access Card For Rich/jones' Cornerstones Of Financial Accounting, 4th
4th Edition
ISBN: 9781337690911
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Question
Chapter 12, Problem 79E
To determine
(a)
Introduction:
The debt management ratio tells the information of debts and equity that forms the capital structure of a firm. The debt management ratios help to calculate the proportion of debt in the capital structure.
To calculate:
The debt management ratio of Steele’s for 2018 and 2019.
To determine
(b)
To indicate:
Whether the ratios have changed from 2018 to 2019 and suggest if the company is riskier for long-term creditors on 31st Dec 2019 than on 31st Dec 2018.
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Assigning a Long-Term Debt Rating Using Financial Ratios
Refer to the information below from Stryker’s 2018 financial statements. Use the information to answer the requirements ($ millions).
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Assigning a Long-Term Debt Rating Using Financial Ratios
Refer to the information below from Stryker’s 2018 financial statements. Use the information to answer the requirements ($ millions).
Revenue
$13,601
Interest expense, gross
$181
Depreciation expense
306
Dividends, including to noncontrolling interest
717
Amortization expense
417
Cash and cash equivalents
3,616
Operating profit (EBIT)
2,537
Marketable securities
83
Total debt
9,859
Average assets
24,713
Cash from operating activities
2,610
CAPEX
572
Funds from operations
2,852
a. Compute the following 10 Moody’s metrics for Stryker for 2018.Round all answers (except Revenue) to one decimal place (example for percentage ratios: 0.2345 = 23.5%).
Ratio
Debt / EBITDA
Answer
EBITA to interest expense
Answer
Revenue ($ millions)
Answer
Retained Cash Flow / Net Debt
Answer
EBITA margin
Answer
Operating margin
Answer
FFO / Debt
Answer
(FFO + Interest Expense)/Interest Expense
Answer…
Based on the following information as of December 31,2020, compute the company’s debt-equity ratio. Assume current liabilities are all interest-bearing.
Round to nearest two decimal places.
Current assets: 15
Non-current assets: 12
Current Liabilities: 22
Non-current Liabilities: 4
Debt to Equity Ratio = ?
Chapter 12 Solutions
Cengagenowv2, 1 Term Printed Access Card For Rich/jones' Cornerstones Of Financial Accounting, 4th
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