Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Question

Refer to the information below from Stryker’s financial statements.

Selected Information (in $ millions)      
Revenue $13,601 Interest expense, gross $181
Depreciation expense 306 Dividends 717
Amortization expense 417 Cash and cash equivalents 3,616
Operating profit (EBIT) 2,537 Marketable securities 83
Total debt 9,859 Average assets 24,713
Cash from operating activities 2,610 CAPEX 572
Funds from operations (FFO) 2,852    

 

Required

a. Compute the following Moody’s metrics for Stryker and identify the Moody's rating (or rating range if the metric is between two ratings) for each metric, using the measures in Exhibit 4.4. If a metric isn't a ratio, enter the amount in the "Result" column.

  Numerator Denominator Result Rating or Rating range
1. Debt/EBITDA Answer 1
 
Answer 2
 
   
  Answer 3
 
Answer 4
 
  Answer 5
2. EBITA to interest expense Answer 6
 
Answer 7
 
   
  Answer 8
 
Answer 9
 
  Answer 10
3. Revenue (in $ billions)     Answer 11
 
Answer 12
4. EBITA margin Answer 13
 
Answer 14
 
   
  Answer 15
 
Answer 16
 
  Answer 17
5. Operating margin Answer 18
 
Answer 19
 
   
  Answer 20
 
Answer 21
 
  Answer 22
6. Funds from operations/Debt Answer 23
 
Answer 24
 
   
  Answer 25
 
Answer 26
 
  Answer 27
7. (Funds from operations + Interest expense)/Interest expense Answer 28
 
Answer 29
 
   
  Answer 30
 
Answer 31
 
  Answer 32
8. EBITA to average assets Answer 33
 
Answer 34
 
   
  Answer 35
 
Answer 36
 
  Answer 37
9. CAPEX/Depreciation expense Answer 38
 
Answer 39
 
   
  Answer 40
 
Answer 41
 
  Answer 42

 

 

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Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning