Question: Analyzing Financial Risk Presented below are summary financial data from the Coca-Cola Enterprises, Inc., annual report. Using the ratio definitions from Exhibit 4.6, calculate the
Analyzing Financial Risk Presented below are summary financial data from the Coca-Cola Enterprises, Inc., annual report. Using the ratio definitions from Exhibit 4.6, calculate the following liquidity and solvency ratios for Year 1 and Year 2.
| (amounts in millions) | Year 1 | Year 2 |
|---|---|---|
| Balance sheet | ||
| Cash and cash equivalents | $155 | $107 |
| Marketable securities | 0 | 0 |
| Accounts receivable (net) | 1,884 | 1,802 |
| Total current assets | 3,371 | 3,395 |
| Total assets | 26,461 | 25,357 |
| Current liabilities | 3,451 | 3,846 |
| Current portion of long-term debt | 607 | 944 |
| Long-term debt | 10,523 | 9,165 |
| Shareholders equity | 5,378 | 5,643 |
| Income statement | ||
| Interest expense | $619 | $633 |
| Net income before taxes | 818 | 790 |
Round all answers to two decimal places.
| Year 1 | Year 2 | |||
|---|---|---|---|---|
| Liquidity | ||||
| Cash and marketable securities to total assets | Answer | % | Answer | % |
| Quick ratio | Answer | Answer | ||
| Current ratio | Answer | Answer | ||
| Solvency | ||||
| Long-term debt to total assets | Answer | % | Answer | % |
| Long-term debt to shareholders equity | Answer | Answer | ||
| Interest coverage ratio | Answer | Answer |
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