Barrick Gold Corporation reported the following selected information (in US$ millions):

Instructions

a. Calculate Barrick Gold?s debt to total assets and interest coverage ratios for each year.

b. Based on the ratios calculated in part (a), what conclusions can you make about Barrick Gold?s solvency?

Taking It Further

Barrick Gold Corp. had total operating leases that required future payments of $68 million of which $21 million was expected to be paid in 2018. Explain the impact that an operating lease has on a company?s solvency ratios. Does this information change any of your conclusions in part (b)?

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2017 2016 Total assets Total liabilities Interest expense Income tax expense Profit $25,308 14,241 $25,264 14,951 591 917 511 1,231 1,516 861