Basic Ratio Analysis
Medtronics is a world leader in medical technology. The following selected data are adapted from a recent annual report. (Dollar amounts are stated in millions.)
| Beginning of the Year | End of the Year |
Total current assets | $ 9,150 | $ 9,515 |
Total current liabilities | 4,726 | 5,857 |
Total assets | 30,675 | 33,083 |
Total stockholders’ equity | 15,968 | 17,113 |
Operating income |
| 4,145 |
Net income |
| 3,617 |
The company has long-term liabilities that bear interest at annual rates ranging from 6 percent to 8 percent.
Instructions
a. Compute the company’s current ratio at ( 1 ) the beginning of the year and ( 2 ) the end of the year. (Carry to two decimal places.)
b. Compute the company’s working capital at ( 1 ) the beginning of the year and ( 2 ) the end of the year. (Express dollar amounts in thousands.)
c. Is the company’s short-term debt-paying ability improving or deteriorating?
d. Compute the company’s ( 1 ) return on average total assets and ( 2 ) return on average stockholders’ equity. (Round average assets and average equity to the nearest dollar and final computations to the nearest 1 percent.)
e. As an equity investor, do you think that Medtronic ’s management is utilizing the company’s resources in a reasonably efficient manner? Explain.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.