For each of the five years of the provided financial statements, calculate and a
ID: 2673036 • Letter: F
Question
For each of the five years of the provided financial statements, calculate and analyze SMM Company's financial below ratios:
Total debt ratio, Times interest earned ratio, and cash coverage ratio
SMM Company
Balance Sheet ($000) 2008 2007 2006 2005 2004
Assets
Current Assets
Cash and cash equivalents $250 $225 $191 $160 $192
Accounts receivable $650 $585 $497 $425 $510
Inventories $300 $270 $230 $200 $240
Total Current Assets $1,200 $1,080 $918 $785 $942
Fixed Assets
Property, plant, and equipment $2,200 $1,870 $1,814 $1,422 $1,400
Less: Accumulated depreciation $400 $200 $180 $80 $75
Net property, plant, and equipment $1,800 $1,670 $1,634 $1,342 $1,325
Intangible assets $300 $240 $220 $210 $205
Total Fixed Assets $2,100 $1,910 $1,854 $1,552 $1,530
Total Assets $3,300 $2,990 $2,772 $2,337 $2,472
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $400 $340 $299 $245 $319
Notes payable $300 $255 $224 $184 $239
Accrued expenses $600 $510 $449 $368 $478
Total Current Liabilities $1,300 $1,105 $972 $797 $1,037
Long-Term Liabilities
Long-term debt $400 $380 $370 $350 $345
Deferred taxes $250 $230 $220 $210 $205
Total Long-Term Liabilities $650 $610 $590 $560 $550
Total Liabilities $1,950 $1,715 $1,562 $1,357 $1,587
Stockholders' Equity
Common stock $100 $100 $100 $100 $100
Capital surplus $450 $420 $410 $380 $370
Retained earnings $800 $755 $700 $500 $415
Total Stockholders' Equity $1,350 $1,275 $1,210 $980 $885
Total Liabilities and Stockholders' Equity $3,300 $2,990 $2,772 $2,337 $2,472
Explanation / Answer
Debt ratio is calculated Total liabilities/Total Assets
Times Interest earned is EBIT/Interest
Cash Coverage is (EBIT+Non cash Expenses)/Interest Expense
Since you don't actually have anything with interest I'm not sure how you will calculate the last two equations.
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