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alt="Screenshot 2020-01-25 20.08.37.png" />I am missing Return on Assets, Return on Capital and Operating profit margin. Can you show me a step by step on how to complete the last 3. I do not understand the math behind it.

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Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT
(Figures in $ millions) Net sales $13,300
Cost of goods sold 4,160
Other expenses 4,087
Depreciation 2,578
Earnings before interest and taxes (EBIT) $ 2,475
Interest expense 695
Income before tax $ 1,780
Taxes (at 30%) 534
Net income $ 1,246
Dividends $ 375 BALANCE SHEET
(Figures in $ millions)
End of Start of Year Year
Assets
Cash and marketable securities $ 91 $ 160
Receivables 2,482 2,530
Inventories 197 248
Other current assets 877 942
Total current assets $ 3,647 $ 3,880
Net property, plant, and equipment 19,993 19,935
Other long—term assets 4,236 3,790
Total assets $ 27,876 $ 27,605
Liabilities and shareholders' equity
Payables $ 2,584 $ 3,060
Short—term debt 1,429 1,583
Other current liabilities 821 797
Total current liabilities $ 4,834 $ 5,440
Long-term debt and leases 6,520 6,475
Other long—term liabilities 6,198 6,169
Shareholders' equity 10,324 9,521
Total liabilities and shareholders' equity $ 27.875 $ 27.505 [—

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Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations.
Round your final answers to 2 decimal places.)
a.
Return on equity (use average balance sheet figures)
15.84 %
b.
Return on assets (use average balance sheet figures)
:%
C.
Return on capital (use average balance sheet figures)
%
Days in inventory (use start-of-year balance sheet figures)
21.76 days
e.
Inventory turnover (use start-of-year balance sheet figures)
16.77
f. Average collection period (use start-of-year balance sheet figures)
69.43 days
g.
Operating profit margin
%
h.
Long-term debt ratio (use end-of-year balance sheet figures)
0.39
i.
Total debt ratio (use end-of-year balance sheet figures)
0.63
j.
Times interest earned
3.56
k.
Cash coverage ratio
7.27
1.
Current ratio (use end-of-year balance sheet figures)
0.75
m. Quick ratio (use end-of-year balance sheet figures)
0.53

Top Answer

(A) Return on assets = 4.49% (B)... View the full answer

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