Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 14,100 Cost of goods sold 4,560 Other expenses 4,217 Depreciation 2,818 Earnings before interest and taxes (EBIT) $ 2,505 Interest expense 735 Income before tax $ 1,770 Taxes (at 21%) 372 Net income $ 1,398 Dividends $ 976 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 99 $ 168 Receivables 2,882 2,690 Inventories 237 288 Other current assets 917 982 Total current assets $ 4,135 $ 4,128 Net property, plant, and equipment 20,073 20,015 Other long-term assets 4,316 3,870 Total assets $ 28,524 $ 28,013 Liabilities and shareholders’ equity Payables $ 2,664 $ 3,140 Short-term debt 1,469 1,623 Other current liabilities 861 837 Total current liabilities $ 4,994 $ 5,600 Long-term debt and leases 4,528 5,043 Other long-term liabilities 6,278 6,249 Shareholders’ equity 12,724 11,121 Total liabilities and shareholders’ equity $ 28,524 $ 28,013 Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. 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) %
Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT (Figures in $ millions) Net sales $ 14,100 Cost of goods sold 4,560 Other expenses 4,217 Depreciation 2,818 Earnings before interest and taxes (EBIT) $ 2,505 Interest expense 735 Income before tax $ 1,770 Taxes (at 21%) 372 Net income $ 1,398 Dividends $ 976 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 99 $ 168 Receivables 2,882 2,690 Inventories 237 288 Other current assets 917 982 Total current assets $ 4,135 $ 4,128 Net property, plant, and equipment 20,073 20,015 Other long-term assets 4,316 3,870 Total assets $ 28,524 $ 28,013 Liabilities and shareholders’ equity Payables $ 2,664 $ 3,140 Short-term debt 1,469 1,623 Other current liabilities 861 837 Total current liabilities $ 4,994 $ 5,600 Long-term debt and leases 4,528 5,043 Other long-term liabilities 6,278 6,249 Shareholders’ equity 12,724 11,121 Total liabilities and shareholders’ equity $ 28,524 $ 28,013 Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. 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) %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Here are simplified financial statements for Phone Corporation in 2020:
| INCOME STATEMENT | |
| (Figures in $ millions) | |
| Net sales | $ 14,100 |
|---|---|
| Cost of goods sold | 4,560 |
| Other expenses | 4,217 |
| 2,818 | |
| Earnings before interest and taxes (EBIT) | $ 2,505 |
| Interest expense | 735 |
| Income before tax | $ 1,770 |
| Taxes (at 21%) | 372 |
| Net income | $ 1,398 |
| Dividends | $ 976 |
| BALANCE SHEET | ||
| (Figures in $ millions) | ||
| End of Year | Start of Year | |
|---|---|---|
| Assets | ||
| Cash and marketable securities | $ 99 | $ 168 |
| Receivables | 2,882 | 2,690 |
| Inventories | 237 | 288 |
| Other current assets | 917 | 982 |
| Total current assets | $ 4,135 | $ 4,128 |
| Net property, plant, and equipment | 20,073 | 20,015 |
| Other long-term assets | 4,316 | 3,870 |
| Total assets | $ 28,524 | $ 28,013 |
| Liabilities and shareholders’ equity | ||
| Payables | $ 2,664 | $ 3,140 |
| Short-term debt | 1,469 | 1,623 |
| Other current liabilities | 861 | 837 |
| Total current liabilities | $ 4,994 | $ 5,600 |
| Long-term debt and leases | 4,528 | 5,043 |
| Other long-term liabilities | 6,278 | 6,249 |
| Shareholders’ equity | 12,724 | 11,121 |
| Total liabilities and shareholders’ equity | $ 28,524 | $ 28,013 |
Calculate the following financial ratios for Phone Corporation:
Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.
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