Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem 6.18E
Solvency Analyses. The following items are from the financial statements of Tall Oak Company.
| Item | 2019 | 2018 |
| Total liabilities | $450,000 | $414,000 |
| Total |
634,000 | 621,000 |
| Net income | 63,000 | 61,000 |
| Tax expense | 18,900 | 18,300 |
| Interest expense | 13,500 | 12,420 |
| Interest paid | 12,100 | 13,660 |
Compute Tall Oak’s debt-to-equity ratio and interest coverage ratio for 2018 and 2019 Comment on Tall Oak’s solvency and changes in solvency from 2018 to 2019.
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Refer to the information below from Stryker’s 2018 financial statements. Use the information to answer the requirements ($ millions).
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$13,601
Interest expense, gross
$181
Depreciation expense
306
Dividends, including to noncontrolling interest
717
Amortization expense
417
Cash and cash equivalents
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Total debt
9,859
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Cash from operating activities
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CAPEX
572
Funds from operations
2,852
a. Compute the following 10 Moody’s metrics for Stryker for 2018.Round all answers (except Revenue) to one decimal place (example for percentage ratios: 0.2345 = 23.5%).
Ratio
Debt / EBITDA
Answer
EBITA to interest expense
Answer
Revenue ($ millions)
Answer
Retained Cash Flow / Net Debt
Answer
EBITA margin
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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 6 Solutions
Intermediate Accounting (2nd Edition)
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