The following selected information was taken from Barrick Gold Corporation's financial statements (in U.S. millions): Instructions (a)
Question:
The following selected information was taken from Barrick Gold Corporation's financial statements (in U.S. millions):
Instructions
(a) Calculate each of the following ratios for 2010 and 2009. Industry ratios are shown in parentheses.
1. Current ratio (2010 2.4:1:1; 2009, 1.9:1) 2. Receivables turnover (2010, 17.6 times; 2009, 19.5 times)
3. Inventory turnover (2010, 3.6 times; 2009, 4.0 times)
4. Debt to total assets (2010, 16.0%; 2009, 17.4%)
5. Times interest earned (2010, 4.6 times; 2009, 16.3 times)
(b) Based on your results in (a), comment on Barrick Gold's liquidity and solvency.
(c) Barrick Gold has three pages of disclosure in the notes to its statements about pending litigation. Discuss the implications of this information for your analysis.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine