Kimmel, Financial Accounting, 8e Help I System Announcements CALCULATOR PRINTER

Question

Kimmel, Financial Accounting, 8e Help I System Announcements CALCULATOR PRINTER VERSTO Exercise 10-16 (Part Level Submission) Suppose McDonald's 2017 financial statements contain the following selected data (in millions). Current assets Total assets Current liabilities Total liabilities $3,350.0 Interest expense 29,000.0 Income taxes 2,950.0 Net income 14,500.0 $450.0 1,800.0 4,300.0 ? (a1) Compute the following values 1. Working capital. 2. Current ratio. (Round to 2 decimal places, e.g. 6.25:1.) 3. Debt to assets ratio. (Round to 0 decimal places, e.g. 62%) 4. Times interest earned. (Round to 2 decimal places, e.g. 6.25.) millions times Attempts: 0 of 5 used SAVE FOR LATERSu (b1) The parts of this question must be completed in order. This part wil be avallable when you complete the part above. 8 5 6 8 9 0

Explanation / Answer

1.Working Capital

Working capital = Current Assets - Current Liabilities

                             = $3350 - $2950

                             = $400 (Million)

2.Current Ratio

Current ratio        = Current Assets / Current Liabilities

                             = $3350 / $2950

                             = 1.14

                            = 1.14 : 1

                  

3. Debt to Total Assets Ratio

Debt to Total Assets Ratio      = Total Liabilities / Total Debt

                                                = $14500 / $29000

                                                = 50 %

4. Times Interest Earned

  =(Net Income + Income Taxes + Interest Expense) / Interest Expense

= ($4300 + $1800 + $450 ) / $450

= 14.56 Times

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.