Phone Corporation

Here are simplified financial statements of Phone Corporation from a recent year:

INCOME STATEMENT
(Figures in millions of dollars)
Net sales 13,600
Cost of goods sold 4,310
Other expenses 4,162
Depreciation 2,668

Earnings before interest and taxes (EBIT) 2,460
Interest expense 710

Income before tax 1,750
Taxes (at 30%) 525

Net income 1,225
Dividends 906

BALANCE SHEET
(Figures in millions of dollars)
End of Year Start of Year
Assets
Cash and marketable securities 94 163
Receivables 2,632 2,590
Inventories
212 263
Other current assets 892 957

Total current assets 3,830 3,973
Net property, plant, and equipment 20,023 19,965
Other long-term assets 4,266 3,820

Total assets 28,119 27,758

Liabilities and shareholders’ equity
Payables 2,614 3,090
Short-term debt 1,444 1,598
Other current liabilities
836 812

Total current liabilities 4,894 5,500
Long-term debt and leases 5,773 5,938
Other long-term liabilities 6,228 6,199
Shareholders’ equity 11,224 10,121

Total liabilities and shareholders’ equity 28,119 27,758
Calculate the following financial ratios: (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)
a. Long-term debt ratio
b. Total debt ratio
c. Times interest earned
d. Cash coverage ratio
e. Current ratio
f. Quick ratio
g. Operating profit margin %
h. Inventory turnover
i. Days in inventory days
j. Average collection period days
k. Return on equity %*
l. Return on assets %
m. Return on capital %**
n. Payout ratio
* – use average equity
** – use average capital
rev: 03_09_2012
check my workebook & resources