Hess Corporation is a global energy company that explores, produces, refines, and markets crude oil and natural
Question:
In Note 1:
Capitalized Interest: Interest from external borrowings is capitalized on material projects using the weighted average cost of outstanding borrowings until the project is substantially complete and ready for its intended use, which for oil and gas assets is at first production from the field.
In Note 7:
The Corporation capitalized interest of $13 million, $5 million, and $6 million in 2011, 2010, and 2009, respectively.
Required:
1. Explain why an analyst would calculate the interest coverage ratio.
2. Did Hess include the $13 million capitalized interest in the reported interest expense of $383 million? If not, should an analyst include it when calculating the interest coverage ratio? Explain.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
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