Brief Exercise 10-18 Suppose the 2019 adidas financial statements contain the fo

Question

Brief Exercise 10-18 Suppose the 2019 adidas financial statements contain the following selected data (in millions) Current assets Total assets Current liabilities Total liabilities Cash $4,320 Interest expense 9,000 Income taxes 3,200 Net income 4,770 $150 100 260 815 Compute the following values (a) Working capital (b) Current ratio. (Round to 2 decimal places, e.g. 6.25:1.) (c) Debt to assets ratio. (Round to 0 decimal places, e.g. 62%.) (d) Times interest earned. (Round to 2 decimal places, e.g. 6.25.) millions times

Explanation / Answer

(A) Working capital = Current assets- current liabilities

Working capital = $4,320 - $3,200 = $1,120

(B) Current ratio= Current assets/ current liabilities

Current ratio = 4,320/3,200 = 1.35

(C) Debt to assets Ratio = Total debt/Assets*100

Debt to assets Ratio = 4,770/9000*100 = 53%

(D) Times interest earned = Earning before interest and taxes/Interest expenses

Times interest earned = ($150+$100+$260/$150) = 3.40

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

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