Compute and Interpret Coverage, Liquidity and Solvency RatiosSelected balance sheet and income statement information from Amazon for 2016 through 2018 follows.$ millions201820172016Net operating profit after tax (NOPAT)$10,978$3,222$2,556Net income10,0733,0332,371Operating profit12,4214,1064,186Interest expense1,417848484Cash from operating activities30,72318,36517,203Current assets75,10160,19745,781Current liabilities68,39157,88343,816Cash and cash equivalents31,75020,52219,334Marketable securities9,50010,4646,647Total debt23,49524,7437,694Assets162,648131,31083,402Liabilities119,099103,60164,117Equity43,54927,70919,285Net operating assets (NOA)25,79421,466998 a. Compute profitability measures RNOA and ROE for 2018 and 2017. In which year are the measures stronger?Round answers to one decimal place (ex: 0.2345 = 23.5%). 20182017RNOAAnswer Answer ROEAnswer Answer b. Compute coverage metrics Times interest earned and Cash from operating activities to total debt for 2018 and 2017.Round answers to two decimal places. 20182017Times interest earnedAnswer Answer Cash from operating activities to total debtAnswer Answer

RNOA: Return on net operating assets reveals the return made by the business from the revenues. It…

Answered: a. Compute profitability measures RNOA…

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 24P: Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of...

See similar textbooks

Related questions

Question

Compute and Interpret Coverage, Liquidity and Solvency Ratios

Selected balance sheet and income statement information from Amazon for 2016 through 2018 follows.

$ millions	2018	2017	2016
Net operating profit after tax (NOPAT)	$10,978	$3,222	$2,556
Net income	10,073	3,033	2,371
Operating profit	12,421	4,106	4,186
Interest expense	1,417	848	484
Cash from operating activities	30,723	18,365	17,203
Current assets	75,101	60,197	45,781
Current liabilities	68,391	57,883	43,816
Cash and cash equivalents	31,750	20,522	19,334
Marketable securities	9,500	10,464	6,647
Total debt	23,495	24,743	7,694
Assets	162,648	131,310	83,402
Liabilities	119,099	103,601	64,117
Equity	43,549	27,709	19,285
Net operating assets (NOA)	25,794	21,466	998

a. Compute profitability measures RNOA and ROE for 2018 and 2017. In which year are the measures stronger?
Round answers to one decimal place (ex: 0.2345 = 23.5%).

	2018	2017
RNOA	Answer	Answer
ROE	Answer	Answer

b. Compute coverage metrics Times interest earned and Cash from operating activities to total debt for 2018 and 2017.
Round answers to two decimal places.

	2018	2017
Times interest earned	Answer	Answer
Cash from operating activities to total debt	Answer	Answer

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.