Question

Looking for help on the questions below for the financial metrics required. If someone could please also explain why my Liability to Equity ratio for 2016 is incorrect; while my ratio for 2015 is correct and I used the same process to get both numbers?

Thanks

550 Consolidated Statements of Earnings Year Ended December 31 (In millions) 2016 2015 Net sales Products $ 40,365 $ 34,868 Services 6,883 5,668 Total net sales 47,248 40,536 Cost of sales Products (36,616) (31,091) Services (6,040) (4,824) Severance and other charges (80) (82) Other unallocated costs (47) Total cost of sales (42,186) (36,044) Gross Profit 5,062 4,492 Other income, net 487 220 Operating profit 5,549 4,712 Interest expense (663) (443) Other non-operating income (expense), net Earnings before taxes 4,886 4,299 Income tax expense (1,133) (1,173) Net earnings from continuing operations 3,753 3,126 Net (loss) earnings from discontinued operations 1,549 479 Net earnings $ 5,302 $ 3,605 30

Answer 1

Ratio Analysis :

		Formula	2016	2015
a	Total liabilities to shareholders equity	Total liabilities / Total shareholders equity*	$ 46,200/ $ 1,606* = 28.77 times	$ 46,207/ $ 3,097 = 14.92 times
b	Total debt to Total equity	(Long term payables + Short term payables) / Total Equity Total liabilities / Total debt	$ 46,200/ $ 1,606 = 28.77 times	$ 46,207/ $ 3,097 = 14.92 times
c	Cash from operations to total debt	Cash from Operations / Total debt	$ 5,189/ $ 46,200 = 11.23%	$ 5,101/ $ 46,207 = 11.04%
d	Free operating cash flows to total debt	Free operating cash flows / Total debt (Cash from operations - Capital expenditure)/ Total debt	($ 5,189-$ 1,063)/$ 46,200 = 8.93%	($ 5,101- $ 939)/$ 46,207 = 9.01%

Non controlling interest in subsidiaries is the portion of total equity.