Calculate the debt ratio (total liabilities to total liabilities and owners' equity), and the debt/equity ratio (total liabilities to total owners' equity)?

11. Based on the results of your analysis above, assess the company's overall leverage position. What would you estimate the industry averages to be for the debt ratio and debt/equity ratio? Explain.

12. Explain the relationship between ROI and ROE, and the concept of financial leverage. Would you expect the percentage difference between ROI and ROE to be high or low for a firm that has a high degree of financial leverage?

target financials

  

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Consolidated Statements of Operations (millions, except per share data) Sales Cost of sales ( Gross margin Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales)" Gain on sale Earnings from continuing operations before interest expense and income taxes Net interest expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings Basic earnings per share Continuing operations Discontinued operations Net earnings per share Diluted earnings per share Continuing operations Discontinued operations Net earnings per share Weighted average common shares outstanding Basic Dilutive effect of share-based awards Diluted $ $ $ $ 2017 71,879 $ 51,125 20,754 14,248 2,194 $ 4,312 666 3,646 718 2,928 6 2,934 $ 5.35 $ 0.01 5.36 $ 5.32 $ 0.01 5.33 $ 546.8 3.5 550.3 4.1 2.46 $ 2016 69,495 $ 49,145 20,350 13,356 2,025 4,969 1,004 3,965 1,296 2,669 68 2,737 S 4.62 S 0.12 4.74 $ 4.58 S 0.12 4.70 $ 577.6 4.9 582.5 0.1 2.36 $ 2015 73,785 52,241 21,544 14,665 1,969 (620) 5,530 607 4,923 1.602 3,321 42 3,363 Antidilutive shares Dividends declared per share Note: Per share amounts may not foot due to rounding. Refer to Note 3 for additional information about a reclassification of supply chain-related depreciation expense to Cost of Sales. ( See accompanying Notes to Consolidated Financial Statements. 5.29 0.07 5.35 5.25 0.07 5.31 627.7 5.2 632.9 2.20 Consolidated Statements of Operations (millions, except per share data) Sales Cost of sales ( Gross margin Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales)" Gain on sale Earnings from continuing operations before interest expense and income taxes Net interest expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings Basic earnings per share Continuing operations Discontinued operations Net earnings per share Diluted earnings per share Continuing operations Discontinued operations Net earnings per share Weighted average common shares outstanding Basic Dilutive effect of share-based awards Diluted $ $ $ $ 2017 71,879 $ 51,125 20,754 14,248 2,194 $ 4,312 666 3,646 718 2,928 6 2,934 $ 5.35 $ 0.01 5.36 $ 5.32 $ 0.01 5.33 $ 546.8 3.5 550.3 4.1 2.46 $ 2016 69,495 $ 49,145 20,350 13,356 2,025 4,969 1,004 3,965 1,296 2,669 68 2,737 S 4.62 S 0.12 4.74 $ 4.58 S 0.12 4.70 $ 577.6 4.9 582.5 0.1 2.36 $ 2015 73,785 52,241 21,544 14,665 1,969 (620) 5,530 607 4,923 1.602 3,321 42 3,363 Antidilutive shares Dividends declared per share Note: Per share amounts may not foot due to rounding. Refer to Note 3 for additional information about a reclassification of supply chain-related depreciation expense to Cost of Sales. ( See accompanying Notes to Consolidated Financial Statements. 5.29 0.07 5.35 5.25 0.07 5.31 627.7 5.2 632.9 2.20

Answer rating: 100% (QA)

To calculate the debt ratio and debtequity ratio we need information on total liabilities and total owners equity Unfortunately the given information does not include these figures Please provide the ... View the full answer