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 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT
(Figures in $ millions)
$ 13,300
4,160
4,087
Net sales
Cost of goods sold
Other expenses
Depreciation
Earnings before interest and taxes (EBIT)
Interest expense
2,578
$ 2,475
695
$ 1,780
534
Income before tax
Тахes (at 30%)
Net income
$ 1,246
Dividends
$
876
BALANCE SHEET
(Figures in $ millions)
End of
Start of
Year
Year
Assets
Cash and marketable securities
$
2,482
$
2,530
91
160
Receivables
Inventories
197
248
Other current assets
877
942
$
$
3,880
19,935
3,790
Total current assets
Net property, plant, and equipment
Other long-term assets
3,647
19,993
4,236
Total assets
$ 27,876
$ 27,605
Liabilities and shareholders' equity
Payables
$
2,584
$
3,060
1,583
Short-term debt
1,429
Other current liabilities
821
797
$ 4,834
6,520
6,198
10,324
5,440
6,475
6,169
9,521
Total current liabilities
$
Long-term debt and leases
Other long-term liabilities
Shareholders' equity
Total liabilities and shareholders' equity
$ 27,876
$ 27,605](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93c69562-319c-4631-9769-6e36e7999d60%2Fa0233fb7-e74d-4072-af00-faacb3a13a49%2F3fscklh_processed.png&w=3840&q=75)
Transcribed Image Text:Here are simplified financial statements for Phone Corporation in a recent year:
INCOME STATEMENT
(Figures in $ millions)
$ 13,300
4,160
4,087
Net sales
Cost of goods sold
Other expenses
Depreciation
Earnings before interest and taxes (EBIT)
Interest expense
2,578
$ 2,475
695
$ 1,780
534
Income before tax
Тахes (at 30%)
Net income
$ 1,246
Dividends
$
876
BALANCE SHEET
(Figures in $ millions)
End of
Start of
Year
Year
Assets
Cash and marketable securities
$
2,482
$
2,530
91
160
Receivables
Inventories
197
248
Other current assets
877
942
$
$
3,880
19,935
3,790
Total current assets
Net property, plant, and equipment
Other long-term assets
3,647
19,993
4,236
Total assets
$ 27,876
$ 27,605
Liabilities and shareholders' equity
Payables
$
2,584
$
3,060
1,583
Short-term debt
1,429
Other current liabilities
821
797
$ 4,834
6,520
6,198
10,324
5,440
6,475
6,169
9,521
Total current liabilities
$
Long-term debt and leases
Other long-term liabilities
Shareholders' equity
Total liabilities and shareholders' equity
$ 27,876
$ 27,605
![Total liabilities and shareholders' equity
$ 27,876
$ 27,605
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)
days
f. Average collection period (use start-of-year balance sheet figures)
days
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)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93c69562-319c-4631-9769-6e36e7999d60%2Fa0233fb7-e74d-4072-af00-faacb3a13a49%2F8rbw48c_processed.png&w=3840&q=75)
Transcribed Image Text:Total liabilities and shareholders' equity
$ 27,876
$ 27,605
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)
days
f. Average collection period (use start-of-year balance sheet figures)
days
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)
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