The data in this case come from the financial reports of Owens-Illinois.*
a. Compute the following ratios for 2006–2008:
1. Current ratio
2. Debt ratio
3. Gross profit margin
4. Operating cash flow/total debt
b. Comment on the ratios in (a)
1. For the three-year period 2006–2008, how much was recognized in expense for asbestos related costs?
2. For the three-year period 2006–2008, how much was paid for asbestos-related payments.
3. Why is there a difference between the expense and the cash payments for asbestos-related for the period 2006–2008?
4. Compute by year (2006–2008) the impact that asbestos charges (expense and payments) had on net cash provided (used) in operating activities.
d. 1. Compute the total capitalization for 2008, 2007, and 2006 (outstanding shares of common stock X market price).
2. Compare the total share owners’ equity related to common stock, with the capitalization.
Comment on the difference.