Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2,
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Calculating Ratios and Estimating Credit Rating
The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions).
Revenue | $13,954 | Earnings from continuing operations | $752 |
Interest expense | 266 | Capital expenditures (CAPEX) | 553 |
Tax expense | 258 | Total debt | 7,257 |
Amortization expense | 8 | Average assets | 15,711 |
Depreciation expense | 526 |
a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/Interest expenses, Debt/EBITDA, CAPEX/Depreciation Expense.
b. Using the ratios calculated in part a., estimate the credit rating that Moody's might assign to Kellogg.
Round answers to one decimal place (percentage ex: 0.2345 = 23.5%)
Ratio | Moody's rating | |
---|---|---|
EBITA/Avg. assets | ||
EBITA margin | ||
EBITA/Int. expense | ||
Debt/EBITDA | ||
CAPEX/Dep. expense |
Related Book For
Essentials of Statistics for the Behavioral Sciences
ISBN: 978-1285056340
8th Edition
Authors: Frederick J Gravetter, Larry B. Wallnau
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