Question: The following data are from Kelloggs 10-K report dated December 29, 2018 ($ millions). Revenue $13,547 Earnings from continuing operations $1,344 Interest expense 287 Capital

The following data are from Kellogg’s 10-K report dated December 29, 2018 ($ millions).

Revenue	$13,547	Earnings from continuing operations	$1,344
Interest expense	287	Capital expenditures (CAPEX)	578
Tax expense	181	Total debt	8,893
Amortization expense	23	Average assets	17,066
Depreciation expense	493

a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/ Interest expense, Debt/EBITDA, CAPEX/Depreciation Expense.

b. Estimate the credit rating that Moody’s might assign to Kellogg.

Round answers to one decimal place (percentage ex: 0.2345 = 23.5%)

	Ratio	Moody's rating
EBITA/Avg. assets
EBITA margin
EBITA/Int. expense
Debt/EBITDA
CAPEX/Dep. expense

Step by Step Solution

★★★★★

3.41 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The following data are from Gennings, Chinchilli, and Carter, (1989). An in vitro toxicity study of isolated hepatocyte suspensions was conducted to study the impact of combining carbon tetrachloride...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...

11. Ethan has healthy parents, but he has autosomal recessive Wilson disease, a disorder in which the body accumulates copper, damaging the liver and nervous system. How might you depict Ethans...

Calculating Ratios and Estimating Credit Rating The following data are from Kelloggs 10-K report dated December 29, 2018 ($ millions). Revenue $13,547 Earnings from continuing operations $1,344...

Question 4 Not yet answered Marked out of 5.00 Flag question Question text Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ($...

Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions). Revenue $13,954 Earnings from continuing operations $752 Interest...

Problem \#1 The following data are from Kellogg's 10-K report dated December 29, 2018 (\$ millions). a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin,...

Exhibit 7.6 Ratio Values for Different Credit Ratings* (FFO + Int Exp)/Int Exp FFO/ Debt RCF/Net Debt 0.9 1.3 EBITA) EBITA EBITA/ Oper Avg AT Margin Int Exp Margin Aaa ........ 16.0% 22.8% 35.7 19.0%...

QUESTION 7 Partially correct Mark 1.00 out of 2.00P Flag question Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ( millions)...

Calculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions). Revenue Interest expense Tax expense Amortization expense...

Describe aspects of revenue recognition that an analyst must be especially alert to.

Glen company has the following data pertaining to the year ended December 31. Purchases $450,000 Beginning inventory Ending inventory 170,000 210,000 Freight-in 50,000 Freight-out 75,000 How much is...

The dual rate cost allocation method classifies cost in each cost into a variable costs, and a fixed cost be budgeted costs, and an actual cost see direct carpool and indirect carpool or the direct...

Financial Trends. You are a new city council person for the City of Scottsdale. Arizona. You are aware that several cities have been in the news recently for financial crises for which the council or...

A 1.2 2.4-Ã m sheet of plywood is temporarily held by nails at D and E and by two wooden braces nailed at A, B, and C. Wind is blowing on the hidden face of the plywood sheet, and it is...

The comparative statements of Jetson Company are shown below. All sales were on account. Net cash provided by operating activities was $108,000. Capital expenditures were $47,000, and cash dividends...

After all revenue and expense account have been closed at the end of the fiscal year, Income Summary has a debit of $315,000 and a credit of $449.500. At the same date, Retained Earnings has a credit...

Ninety kilograms of sodium nitrate is dissolved in 110 kg of water. When the dissolution is complete (at time r = 0), pure water is fed to the tank at a constant rate m (kg/min), and solution is...

In the City of Manchester, New Hampshire, Fund A transfers $20,000 in cash to Fund B. For each of the following, indicate whether the statement is true or false, and if false, explain why. 1. If Fund...

Unilever is a Anglo-Dutch supplier of fast moving consumer goods. The two parent companies, Unilever N.V. and Unilever PLC, together with their group companies, operate as Unilever Group. The...

Bernstein Co is a limited liability company. The annual general assembly, held on 6 May X1, voted to issue an additional 2,500 shares (each with a par of 550 CU). The public offering price is set at...

Mr. Schultz, the managing partner of an accounting firm, is concerned by some specific rules of revenue recognition adopted by some of his clients. The following list contains some of the rules he...

=+(cf. Example 5.8, Section 5.3) and that each component has a .999 probability of functioning without failure. What lower bound can you put on the reliability (i.e., the probability of functioning...

=+12. Suppose that 55% of all adults regularly consume coffee, 45% regularly consume carbonated soda, and 70% regularly consume at least one of these two types of drinks.

=+.01 probability of failing. Find an upper bound on the probability that the entire system fails.