rporation Modern Stores, Inc. 1. Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $15,256 $203,110 2. Total common stockholders' equity. . . . . $3,075 $71,460 3. Operating income. . . . . . . . . . . . . . . . . . . . $1,350 $26,820 4. Interest
rporation Modern Stores, Inc. 1. Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $15,256 $203,110 2. Total common stockholders' equity. . . . . $3,075 $71,460 3. Operating income. . . . . . . . . . . . . . . . . . . . $1,350 $26,820 4. Interest
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section17.4: Analyzing Financial Statements Using Financial Ratios
Problem 1WT
Related questions
Question
Examine the following selected financial information for
Best Value
Corporation and
Modern
Stores, Inc., as of the end of their fiscal years ending in
2018:
Data table
(In millions)
|
Best Value Corporation
|
Modern Stores, Inc.
|
|||||
---|---|---|---|---|---|---|---|
1.
|
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . .
|
$15,256
|
|
$203,110
|
|||
2.
|
Total common
|
$3,075
|
|
$71,460
|
|||
3.
|
Operating income. . . . . . . . . . . . . . . . . . . .
|
$1,350
|
|
$26,820
|
|||
4.
|
Interest expense. . . . . . . . . . . . . . . . . . . . . .
|
$88
|
|
$2,020
|
|||
5.
|
Leverage ratio. . . . . . . . . . . . . . . . . . . . . . . .
|
|
|
|
|||
6.
|
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
|
|
|
|||
7.
|
Debt ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
|
|
|
|||
8.
|
Times interest earned. . . . . . . . . . . . . . . . .
|
|
|
|
|
|
|
Requirements
1.
|
Complete the table, calculating all the requested information for the two companies. Use year-end figures in place of averages where needed for the purpose of calculating the ratios in this exercise.
|
2.
|
Evaluate each company's long-term debt-paying ability (strong, medium, weak).
|
1. Complete the table, calculating all the requested information for the two companies. Use year-end figures in place of averages where needed for the purpose of calculating ratios in this exercise. (Round your answers to two decimal places, X.XX. Enter amounts in millions as provided to you in the problem statement.)
(In millions)
|
Best Value Corporation
|
Modern Stores, Inc.
|
|||||
1.
|
Total assets. . . . . . . . . . . . . . . . .
|
$15,256
|
|
$203,110
|
|||
2.
|
Total Stockholders' equity. . . . . .
|
$3,075
|
|
$71,460
|
|||
3.
|
Operating income. . . . . . . . . . . .
|
$1,350
|
|
$26,820
|
|||
4.
|
Interest expense. . . . . . . . . . . . .
|
$88
|
|
$2,020
|
|||
5.
|
Leverage ratio. . . . . . . . . . . . . . .
|
|
|
|
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