Compute Liquidity and Solvency Ratios for Competing FirmsHalliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements.$ millionsCash and equivalentsShort-term investmentsAccounts receivableCurrent assetsCurrent liabilitiesTotal liabilitiesTotal equityEarnings before interest and tax (EBIT)Interest expense, grossHAL SLB$2,008 $1,4331,3445,391 8,11711,151 15,7314,946 13.89116,438 33,9211. Current ratio2. Quick ratio3. Times interest earned4. Liabilities-to-equity9,830 37,6842,541 3,142554 537a. Compute the following measures for both companies.Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555).HALSLBb. Which company appears more liquid?c. Which company appears more solvent?◆

Ratios measure the relationship between two or more components state in the financial statement.…

Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements $ millions Cash and equivalents Short-term investments Accounts receivable Current assets Current liabilities Total liabilities Total equity 16,438 33,921 9,830 37,684 Earnings before interest and tax (EBIT) 2,541 3,142 Interest expense, gross 554 537 HAL SLB $2,008 $1,433 1,344 5,391 8,117 11,151 15,731 4,946 13,891 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity SLB b. Which company appears more liquid? c. Which company appears more solvent? + +

Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements $ millions Cash and equivalents Short-term investments Accounts receivable Current assets Current liabilities Total liabilities Total equity 16,438 33,921 9,830 37,684 Earnings before interest and tax (EBIT) 2,541 3,142 Interest expense, gross 554 537 HAL SLB $2,008 $1,433 1,344 5,391 8,117 11,151 15,731 4,946 13,891 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity SLB b. Which company appears more liquid? c. Which company appears more solvent? + +

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Compute Liquidity and Solvency Ratios for Competing Firms
Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements.
$ millions
Cash and equivalents
Short-term investments
Accounts receivable
Current assets
Current liabilities
Total liabilities
Total equity
Earnings before interest and tax (EBIT)
Interest expense, gross
HAL SLB
$2,008 $1,433
1,344
5,391 8,117
11,151 15,731
4,946 13.891
16,438 33,921
1. Current ratio
2. Quick ratio
3. Times interest earned
4. Liabilities-to-equity
9,830 37,684
2,541 3,142
554 537
a. Compute the following measures for both companies.
Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555).
HAL
SLB
b. Which company appears more liquid?
c. Which company appears more solvent?
◆

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Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions Cash and equivalents Short-term investments Accounts receivable HAL SLB $2,008 $1,433 1,344 5,182 7,802 Current assets Current liabilities Total liabilities Total equity 11,151 15,731 4,754 13,351 16,438 33,921 9,449 36,220 Earnings before interest and tax (EBIT) 2,442 3,020 Interest expense, gross 554 537 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL SLB 1. Current ratio 2.32 X 1.17 x 2. Quick ratio 1.5 x 0.68 * 3. Times interest earned 4.45 x 5.67 x 4. Liabilities-to-equity 1.7 x 0.92 x b. Which company appears more liquid? HAL c. Which company appears more solvent? SLB =>
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