Presented below is selected financial information for Matthews Corporation for t
ID: 3199678 • Letter: P
Question
Presented below is selected financial information for Matthews Corporation for the most recent fiscal year ended December 31 ($ millions) Assets Liabilities Cash and cash equivalents 2,432 Accounts payable 5,030 Short-term investment 1,456 Other current liabilities 2,747 Receivables, net 1,280 Total current liabilities 7,777 Merchandise inventories 5,174 Long-term liabilities 2,479 Other current assets 1,387 Shareholders' Equity 5,000 Total current assets 11,729 Total liabilities and shareholders' equity 15,256 Noncurrent assets 3,527 Total assets 15,256 Revenues 40,339 Costs and Expenses 38,889 Operating Income 1,450 Other income/expense (including interest expense of $90) (63) Income before income tax 1,387 Income tax expense 141 Net income including noncontrolling interests 1,246 Previous Year's Financial Data Total Assets 14,013 Shareholders' Equity 3,989 13. The debt to equity ratio for Matthews Corporation is ________. A. 0.495 B. 2.051 C. 2.280 D. 0.992 . Presented below is selected financial information for Matthews Corporation for the most recent fiscal year ended December 31 ($ millions) Assets Liabilities Cash and cash equivalents 2,432 Accounts payable 5,030 Short-term investment 1,456 Other current liabilities 2,747 Receivables, net 1,280 Total current liabilities 7,777 Merchandise inventories 5,174 Long-term liabilities 2,479 Other current assets 1,387 Shareholders' Equity 5,000 Total current assets 11,729 Total liabilities and shareholders' equity 15,256 Noncurrent assets 3,527 Total assets 15,256 Revenues 40,339 Costs and Expenses 38,889 Operating Income 1,450 Other income/expense (including interest expense of $90) (63) Income before income tax 1,387 Income tax expense 141 Net income including noncontrolling interests 1,246 Previous Year's Financial Data Total Assets 14,013 Shareholders' Equity 3,989 13. The debt to equity ratio for Matthews Corporation is ________. A. 0.495 B. 2.051 C. 2.280 D. 0.992 .Explanation / Answer
The debt to equity ratio is calculated by dividing the total liability by the shareholder's equity for the current year. Hence for this question, the trick lies in the liability chart on the top right. Just calculate the total liability that is Rs10256(obtained by adding the total current liability[7777] and the long-term liability[2479]). Total shareholder's equity is already given to be Rs 5000. Hence your answer comes out to be 10526/5000=2.051 that is option B