Question

Compute and interpret Liquidity and Solvency Ratios Selected balance sheet and income statement information from Verizon Communications, Inc., follows (in millions) 2015 Current assets $29,623 570.994 Current liabilities 28,064 27.050 Total liabilities 219.032 178,682 Equity 13,676 95,416 Earnings before interest and taxes 20,185 31,944 Interest expense 4,915 2,667 Net cash flow from operating activities 30,631 38,818 a. Compute the current ratio for each year. Round answers to two decimal places. 2014 2013 b. Compute times interest earned (TIE), the debt-to-equity (D/E), and the operating cash flow to current liabilities (OCFCL) ratios for each year. (In 2012, current liabilities totaled $26,956 million.) Round answers to two decimal places. When applicable, do not round until your final answer. 2014 2013 TIE OCFCL

Answer 1

a)
Current Ratio = Current Assets / Current Liabilities
2014
	= $29623/29064
	=1.02 times
2013
	= $70994/27050
	=2.62 times
b)	Times Interest Earned Ratio = EBIT/ Interest expenses
2014
	= $20185/4915
	=4.11 times
2013
	= $31944/2667
	=11.98 times
	Debt To Equity Ratio = Total Debt / Total Equity
2014
	= $219032/13676
	=16.02times
2013
	= $178682/95416
	=1.87 times
	Operating Cash Flow to current liabilities ratio
	= Operating Cash Flow/ Current Liabilities
2014	=$30631/28064
	=1.09 times
2013	=$38818/27050
	=1.44 times
Let me know the wrong answer. Please upvote.