Advance Auto Parts, Inc. is “. . . a leading automotive aftermarket parts provider in North America. . . . We were founded in 1929 as Advance Stores Company. . . . As of January 2, 2016 . . . we operated 5,171 total stores and 122 branches primarily under the trade names ‘Advance Auto Parts,’ ‘Autopart International,’ ‘Carquest,’ and ‘Worldpac.’”

Foot Locker, Inc. “. . . incorporated under the laws of the State of New York6 in 1989, is a leading global retailer of athletically inspired shoes and apparel, operating 3,383 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of January 30, 2016.”

Johnson & Johnson, Inc. “. . . and its subsidiaries have approximately 127,1007 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the health care field. . . . The Company’s primary focus is products related to human health and well-being.

Johnson & Johnson was incorporated in the State of New Jersey in 1887.” Tesla, Inc.: “We design, develop, manufacture and sell high-performance8 fully electric vehicles, and energy storage systems, as well as install, operate and maintain solar and energy storage products.

We are the world’s only vertically integrated energy company, offering end-to-end clean energy products, including generation, storage and consumption.”

Each company received a different rating from Standard & Poor’s (S&P). In descending order, the ratings for these companies were AAA, BBB-, BB+, and B-. These rating are as of March 16, 2017. All dollar amounts are in millions.

Required

Determine which credit rating was assigned to which company. Write a memorandum explaining the rationale for your decisions. The logic you present to support your conclusions is more important than correctly matching the companies with their ratings.

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Cash Flow from Debt-to- Times Interest Return-on- Net Income Operations Current Ratio Assets Ratio Earned Assets Ratio Advance Auto Parts $ 473 460 $ 690 2015 1.30 0.70 12.57 0.058 2016 501 1.41 0.65 13.32 0.055 Foot Locker 2015 520 712 3.53 0.30 162.80 0.145 2016 541 745 3.72 0.32 210.25 0.143 Jonnson & Johnson 15,409 16,540 2015 19,279 18,767 2.17 0.47 35.78 0.116 2016 2.47 0.50 28.28 0117 Tesla 2015 (889) (773) (524) (124) 0.99 0.87 -6.37 -0.110 2016 1.07 0.79 -2.75 -0.034