Brief Exercise 10-14 Suppose the 2017 adidas financial statements contain the fo

Question

Brief Exercise 10-14 Suppose the 2017 adidas financial statements contain the following selected data (in millions). $150 120 250 $4,780 Interest expense Current assets Total assets Current liabilities Total liabilities Cash 8,990 Income taxes 3,120 Net income 5,214 770 Compute the following values. (a) Working capital. (b) Current ratio. (Round to 2 decimal places, e.g. 6.25:1.) millions (c) Debt to assets ratio. (Round to O decimal places, e.g. 62%.) times (d) Times interest earned. (Round to 2 decimal places, e.g. 6.25.) INTERACTIVE TUTORIAL LINK TO TEXT Question Attempts: 0 of 2 used S Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc en/shared/assignment/test/ag ist.uni?id-asnm 2.

Explanation / Answer

1 Working Capital Current Asset - Current Liabilities (4780 +770) - 3120 2430 millions * Here we are assumed that Current asset not including Cash 2 Current Ratio Current Asset / Current Liabilities (4780 +770) / 3120 5550 / 3120                                                                             1.78 : 1 3 Debt to assets ratio Total Debt / Total Assets 5214 / 8990                                                                             0.58 % 4 Times Interest earned Income before Interest and taxes or EBIT / Interest expenses (250+120+150) / 150                                                                             3.47 times

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