Accounts receivable (net). Total current assets. Total assets Current liabilitie

Question

Accounts receivable (net). Total current assets. Total assets Current liabilities Current portion of long-term debt Long-term debt Shareholders' equity 70,483 31,973 27,022 151,993 492,692 105,112 42,773 145,301 98,274 70,025 35,505 23,237 146,456 654,954 111,669 38,988 186,596 128,159 Income statement Interest expense.. Net income before taxes $ 3,463 2,723 .. . . . . . . . . 8,186 10,263 418 Analyzing Financial Risk. Presented below are summary financial data from the The Coca-Cola Company TA 2015 annual report. Using the ratio definitions from Exhibit 4.6, calculate the following liquidity and solvency ratios: cash and marketable securities to total assets, quick ratio, current ratio, long-term debt to total assets, long- term debt to shareholders' equity, and the interest coverage ratio. Evaluate the company's liquidity and solvency. (amounts in millions) 2015 2014 Balance sheet Cash and cash equivalents .. Marketable securities $15631 $18,010 4,269 3,665 4,466 3,941 32.986 Accounts receivable (net). 33,395 92,023 90,093 3374 Total assets . Current portion of long-term debt.. Long-term debt. Shareholders' equity . 26,930 2,677 28,407 25,764 3,552 19,063 30,561 .. Income statement $ 856 $ 483 Net income before taxes EA.19 Analyzing Financial Risk. Presented below are summary financial data from The Boeing Company 2015 Exhibit 4.6, calculate the following liquidity and solvency ratios: annual report. Using the ratio definitions from cash and marketable securities to total assets, qui to shareholders' ck ratio, current ratio, long-term debt to total assets, long-term debt equity, and the interest coverage ratio. Evaluate The Boeing Company's liquidity and solvency. 2015 2014 ts in millions) heet d cash equivalents ble securities $11,302 750 $11,733 1,359

Explanation / Answer

1) Calculation of given liquidity and solvency ratios :

Cash&Marketable securities to total assets :

2015: = ($15,631+$4,269) / $90,093

= 0.22

2014 : = ($18,010+$3,665) / $92,023

= 0.24

Quick ratio :

2015: = ($15,631+$4,269+$3,941) / $26,930

= 0.89

2014 : = ($18,010+$3,665+$4,666) / $32,374

= 0.81

Current ratio :

2015: = $33,395 / $26,930

= 1.24

2014 : = $32,986 / $32,374

= 1.02

Long term debt to total assets :

2015: = $28,407/ $90,093

= 0.32

2014 : = $19,063 / $92,023

= 0.21

Long term debt to shareholder's equity :

2015: = $28,407 / $25,764

= 1.10

2014 : = $19,063 / $30,561

= 0.62

Interest Coverage ratio :

2015: = ($856+$9,605) / $856

= 12.22

2014: = ($483+$9,325) / $483

= 20.30

Comments on position of liquidity and sovency of the company :

By observing all the above calculated ratios company was showing a good change from the 2014 to 2015.It's position was improving in terms of sovency and liquidity but not up to the bench mark but improving.If it shows the same trend definitely it reach the bench mark ratios provided for the above calculated ratios.It should increase it's current and quick assets in future as well dependency on long term debt.

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