The following information was obtained from the comparative financial statements included in Millenium (Pty )(Ltd)’s 2017 annual report. (All amounts are in millions of Rands) December 2017 December 2016 R R Total liabilities 95,050 90,960 Total shareholders’ equity 13,460 27,470 For the Years Ended December 2017 December 2016 R R Interest expense 730 600 Provision for income taxes 4,300 4,070 Net income 14,000 10,400 Net cash provided by operating activities from continuing operations 18,700 16,000 Cash dividends paid 2,450 2,010 Payments for plant, rental machines and other property 4,010 4,630 Payments to settle debt 10,000 11,530 Required: 1. Using the information provided, compute the following for 2017 and 2016: a. Debt-to-equity ratio (at each year-end) b. Times interest earned ratio c. Debt service coverage ratio
The following information was obtained from the comparative financial statements included in Millenium (Pty )(Ltd)’s 2017 annual report. (All amounts are in millions of Rands)
December 2017 December 2016
R R
Total liabilities 95,050 90,960
Total shareholders’ equity 13,460 27,470
For the Years Ended December 2017 December 2016
R R
Interest expense 730 600
Provision for income taxes 4,300 4,070
Net income 14,000 10,400
Net cash provided by operating activities
from continuing operations 18,700 16,000
Cash dividends paid 2,450 2,010
Payments for plant, rental machines
and other property 4,010 4,630
Payments to settle debt 10,000 11,530
Required:
1. Using the information provided, compute the following for 2017 and 2016:
a. Debt-to-equity ratio (at each year-end)
b. Times interest earned ratio
c. Debt service coverage ratio
d.
2. Comment briefly on the company’s solvency.
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