Question: Can't figure out times interest earned. Please post steps so I can see how it's done. Thank you! NIKE, INC. Consolidated Statements of Income Year
Can't figure out times interest earned. Please post steps so I can see how it's done. Thank you!
| NIKE, INC. Consolidated Statements of Income | |||
|---|---|---|---|
| Year Ended December 31 (In millions) | 2019 | 2018 | |
| Revenues | $39,117 | $36,397 | |
| Cost of sales | 21,643 | 20,441 | |
| Gross profit | 17,474 | 15,956 | |
| Demand creation expense | 3,753 | 3,577 | |
| Operating overhead expense | 8,949 | 7,934 | |
| Total selling and administrative expense | 12,702 | 11,511 | |
| Interest expense (income), net | 49 | 54 | |
| Other (income) expense, net | (78) | 66 | |
| Income before income taxes | 4,801 | 4,325 | |
| Income tax expense | 772 | 2,392 | |
| Net income | $ 4,029 | $ 1,933 | |
| Consolidated Balance Sheets | ||
|---|---|---|
| May 31 (in millions) | 2019 | 2018 |
| Current Assets | ||
| Cash and cash equivalents | $ 4,466 | $ 4,249 |
| Short-term investments | 197 | 996 |
| Accounts receivable, net. | 4,272 | 3,498 |
| Inventories | 5,622 | 5,261 |
| Prepaid expenses and other current assets | 1,968 | 1,130 |
| Total current assets | 16,525 | 15,134 |
| Property, plant and equipment, net | 4,744 | 4,454 |
| Identifiable intangible assets, net | 283 | 285 |
| Goodwill | 154 | 154 |
| Deferred income taxes | 2,011 | 2,509 |
| Total assets | $23,717 | $22,536 |
| Liabilities and stockholders' equity | ||
| Current Liabilities | ||
| Current portion of long-term debt | $6 | $6 |
| Notes payable | 9 | 336 |
| Accounts payable | 2,612 | 2,279 |
| Accrued pension liabilities | 5,010 | 3,269 |
| Income taxes payable | 229 | 150 |
| Total current liabilities | 7,866 | 6,040 |
| Long-term debt | 3,464 | 3,468 |
| Deferred income taxes and other liabilities | 3,347 | 3,216 |
| Shareholders equity | ||
| Class A convertible315 and 329 shares outstanding | -- | -- |
| Class B1,253 and 1,272 shares outstanding | 3 | 3 |
| Capital in excess of stated value | 7,163 | 6,384 |
| Accumulated other comprehensive income (loss) | 231 | (92) |
| Retained earnings | 1,643 | 3,517 |
| Total shareholders equity | 9,040 | 9,812 |
| Total liabilities and stockholders' equity | $23,717 | $22,536 |
| Consolidated Statement of Cash Flows | |||
|---|---|---|---|
| Year Ended May 31 (in millions) | 2019 | 2018 | |
| Cash provided by operations: | |||
| Net income | $4,029 | $1,933 | |
| Adjustments to reconcile net income to net cash provided by operations: | |||
| Depreciation | 705 | 747 | |
| Deferred income taxes | 34 | 647 | |
| Stock-based compensation | 325 | 218 | |
| Amortization and other | 15 | 27 | |
| Net foreign currency adjustments | 233 | (99) | |
| Changes in certain working capital components and other assets and liabilities: | |||
| (Increase) decrease in accounts receivable | (270) | 187 | |
| (Increase) decrease in inventories | (490) | (255) | |
| (Increase) decrease in prepaid expenses and other current and non-current assets | (203) | 35 | |
| Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,525 | 1,515 | |
| Cash provided by operations | 5,903 | 4,955 | |
| Cash provided (used) by investing activities: | |||
| Purchases of short-term investments | (2,937) | (4,783) | |
| Maturities of short-term investments | 1,715 | 3,613 | |
| Sales of short-term investments | 2,072 | 2,496 | |
| Additions to property, plant and equipment | (1,119) | (1,028) | |
| Disposals of property, plant and equipment | 5 | 3 | |
| Other investing activities. | -- | (25) | |
| Cash provided (used) by investing activities | (264) | 276 | |
| Cash used by financing activities: | |||
| Long-term debt payments, including current portion | (6) | (6) | |
| Increase (decrease) in notes payable | (325) | 13 | |
| Payments on capital lease and other financing obligations | (27) | (23) | |
| Proceeds from exercise of stock options and other stock issuances | 700 | 733 | |
| Repurchase of common stock | (4,286) | (4,254) | |
| Dividendscommon and preferred | (1,332) | (1,243) | |
| Tax payments for net share settlement of equity awards | (17) | (55) | |
| Cash used by financing activities | (5,293) | (4,835) | |
| Effect of exchange rate changes on cash and equivalents | (129) | 45 | |
| Net increase (decrease) in cash and equivalents | 217 | 441 | |
| Cash and equivalents, beginning of year | 4,249 | 3,808 | |
| Cash and equivalents, end of year | $4,466 | $4,249 | |
(c) Compute times interest earned ratio, cash from operations to total debt ratio, and free operating cash flow to total debt ratios. Note: Round answers to two decimal places. 2019 times interest earned =
2018 times interest earned =
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