Answer A and B to E4-22.

Exhibit 4.7

Module 4 1 Credit Risk Analysis and Interpretation 4-40 EXERCISES E4-22.A Assigning a Long-Term Debt Rating Using Financial Ratios LO3, 4 Refer to the information below from Nordstrom Inc.'s 2016 financial statements. Use t answer the requirements (S millions). NORDSTROM INC. JWN) he information to MBC $14,095 560 Sales. 376 153 600 1,117 595 Interest expense, gross Earnings from continuing operations (Net income) EBITA . Average total assets... Total debt 8,472 2,805 324 Noncurrent deferred tax liabilities Noncontrolling interest.. Equity 871 ..1,185 Cash from operating activities ..........................................2.,451 Required a. Compute the following seven Moody's metrics for Nordstrom. See Appendix 4A for definitions. EBITA to average assets Operating margin EBITA margin EBITA interest coverage Debt to EBITDA Debt to book capitalization Retained cash flow to net debt b. Use your computations from part a, along with measures in Exhibit 4.7, to estimate the long-term debt rating for Nordstrom