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    Cash Flow to Total Liabilities Ratio

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    Calculate the Cash Flow to Total Liabilities Ratio and the Return to Net Operating Ratio
    for Johnson and Johnson (2002)


    Here are the sites with the financial statements and data:





    I have also attached the text pages with the example of how to calculate
    the Cash Flow to Total Liabilities Ratio and the Return to Net Operating Ratio

    These are initial calculations which I think are incorrect or incomplete:

    (please refer to formulas in the two image files and solve

    Cash flow to total liabilities ratio:

    Total Cash on Hand at end of year = 2,894,000,000
    Total Liabilities = 17,859,000,000
    2,894,000,000/17,859,000,000 = 0.1620 or

    Return to net operating ratio:

    Net operating margin:

    Net operating profit X 100 / net operating revenues
    6,597,000,000 X 100/25,851,000,000

    Return on total assets:
    (Profit before taxation) X 100 / average total assets
    9,291,000,000 X 100/40,556,000,000

    Return on equity:
    (Profit before taxation - taxation) X 100 / average equity
    (9,291,000,000 - 2,694,000,000) X 100/22,697,000,000


    In your solution, please make sure you follow the formulas in the two image files
    AND tell me where you pulled in each number from.

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    Solution Preview

    I obtained the following numbers by following the link provided:


    Here are the calculations:

    Cash Flow To Total Liabilities Ratio:

    (Revenue - Expense) + Depreciation / Total Liabilities

    Total Liabilities:

    Total Current Liabilities = 11,449,000
    Long Term Debt = 2,022,000
    Deferred Tax Liability = 643,000
    Employee Related Obligat. = ...

    Solution Summary

    The cash flows to total liabilities ratios are determined. The financial statements and data are analyzed.