Assignments Chapter 9 Homework Chapter 9 Homework ACCOUNTING 2010-SURVEY OF FINA
ID: 2402966 • Letter: A
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Assignments Chapter 9 Homework Chapter 9 Homework ACCOUNTING 2010-SURVEY OF FINANCIAL ACCOUNTING Homework: Chapter 9 Homework Score: 0 of 10 pts Instructor-created question 6 of 6(5 complete) Companies that operate in different industries may have very different financial raio values. These differences may grow even wider when we compare EE (Click the lcon to view the financial statements.) Requirement 1. Compare three leading companies (Company B Company N, and Company R) by calculating the following raios: current rato, debt ratio, and s ratios in this exercise. Based on your computed ratio values, which company looks the least risky? Begin by computing the ratios. Start by selecting the formula for the current ratio. Then calculate the current ratios for Company B, N, and R (Enter am Total current lablites 237 2,207 72,100 Total current assets Company B Company N Company R Next, select ??fomulafrthe debt raso. Then calculate the debt ratos for Company B, N, and R (Enter armourns in milions or blion, as provided to Current rato 1.78 2.13 1.75 4,701 Total liabilities Total assets Debt ratio Company EB Company N Company R Next, select the t R. (Enter amounts in n Data Table Company B Company N Company R Basedonte de Company R Amounts in millions or billions) Income data Total revenues Operating income Interest expense Net income Asset and liablity data (Amounts in mittions or billions) Total current assets Long-serm assets Total current liabiities Company BCompany N 7317 136,409 9,734 297 32 704 20 26,896 685 2,207 2,317 662 72,100 110,617 13,753 237 Choose from anyLong-derm liabises All parts showinStoanalders' equty Clear AlExplanation / Answer
Company B
Total Liability = Current Liabilities + Long term liability
= 237 + 117 = 354
Total Asset = Current Asset + Long term asset
= 421 + 89 = 510
Debt Ratio = Total Liability / Total Asset
= 354 / 510 = 0.70 Approx
Company N
Total Liability = Current Liabilities + Long term liability
= 2207 + 2317 = 4524
Total Asset = Current Asset + Long term asset
= 4701 +685 = 5386
Debt Ratio = Total Liability / Total Asset
= 4524 / 5386 = 0.84 Approx
Company R
Total Liability = Current Liabilities + Long term liability
= 72100 + 110617 = 182717
Total Asset = Current Asset + Long term asset
= 126896 + 69574 = 196470
Debt Ratio = Total Liability / Total Asset
= 182717/ 196470 = 0.93 Approx
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