Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements $ millions Cash and equivalents Short-term investments Accounts receivable Current assets Current liabilities Total liabilities Total equity 16,438 33,921 9,830 37,684 Earnings before interest and tax (EBIT) 2,541 3,142 Interest expense, gross 554 537 HAL SLB $2,008 $1,433 1,344 5,391 8,117 11,151 15,731 4,946 13,891 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity SLB b. Which company appears more liquid? c. Which company appears more solvent? + +

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Compute Liquidity and Solvency Ratios for Competing Firms
Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements.
$ millions
Cash and equivalents
Short-term investments
Accounts receivable
Current assets
Current liabilities
Total liabilities
Total equity
Earnings before interest and tax (EBIT)
Interest expense, gross
HAL SLB
$2,008 $1,433
1,344
5,391 8,117
11,151 15,731
4,946 13.891
16,438 33,921
1. Current ratio
2. Quick ratio
3. Times interest earned
4. Liabilities-to-equity
9,830 37,684
2,541 3,142
554 537
a. Compute the following measures for both companies.
Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555).
HAL
SLB
b. Which company appears more liquid?
c. Which company appears more solvent?
◆
Transcribed Image Text:Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions Cash and equivalents Short-term investments Accounts receivable Current assets Current liabilities Total liabilities Total equity Earnings before interest and tax (EBIT) Interest expense, gross HAL SLB $2,008 $1,433 1,344 5,391 8,117 11,151 15,731 4,946 13.891 16,438 33,921 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity 9,830 37,684 2,541 3,142 554 537 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL SLB b. Which company appears more liquid? c. Which company appears more solvent? ◆
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