Calculating Financial Ratios for Phone Corporation
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Calculating Financial Ratios for Phone Corporation
a. Long-term debt ratio
b. Total debt ratio
c. Times interest earned
d. Cash coverage ratio =
e. Current ratio
f. Quick ratio
g. Operating profit margin
h. Inventory turnover
i. Days in inventory
j. Average collection period
k. Return on equity
l. Return on assets
m. Payout ratio
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This solution is comprised of a detailed explanation to calculate Financial Ratios for Phone Corporation.
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a. Long-term debt ratio = Long-term debt
Long-term debt + Stockholders' Equity
= 7,018 + 6,178
7,018 + 6,178 + 9,724
= 0.58
b. Total debt ratio = Debt/Total Assets
= 17,990/27,714
= 64.91%
c. Times interest earned = Earnings before interest and tax
Interest charges
= 2,566
...
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