Compute and Interpret Liquidity, Solvency and Coverage
Ratios
Selected balance sheet and income statement information for Calpine
Corporation for 2004 and 2006 follows.
| ($ millions) | 2004 | 2006 |
|---|---|---|
| Cash | $ 1,376.73 | $ 1,503.36 |
| Accounts receivable | 1,097.16 | 735.30 |
| Current assets | 3,563.56 | 3,168.33 |
| Current liabilities | 3,285.39 | 6,057.95 |
| Long-term debt | 16,940.81 | 3,351.63 |
| Short-term debt | 1,033.96 | 4,568.83 |
| Total liabilities | 22,628.42 | 25,743.17 |
| Interest expense | 1,516.90 | 1,288.29 |
| Capital expenditures | 1,545.48 | 211.50 |
| Equity | 4,587.67 | (7,152.90) |
| Cash from operations | 9.89 | 155.98 |
| Earnings before interest and taxes | 1,589.84 | 1,877.84 |
(a) Compute the following liquidity, solvency and coverage
ratios for both years. (Round your answers to two decimal
places.)
2006 current ratio = Answer
2004 current ratio = Answer
2006 quick ratio = Answer
2004 quick ratio = Answer
2006 liabilities-to-equity = Answer
2004 liabilities-to-equity = Answer
2006 total debt-to-equity = Answer
2004 total debt-to-equity = Answer
2006 times interest earned = Answer
2004 times interest earned = Answer
2006 cash from operations to total debt = Answer
2004 cash from operations to total debt = Answer
2006 free operating cash flow to total debt = Answer
2004 free operating cash flow to total debt = Answer
(b) Which of the following best describes the company's credit
risk?
Both the quick ratio and current ratio for 2006 are lower than 1.0 and have increased in the past two years. Along with interest coverage ratios that are exceedingly high, the probability that the company will face default has significantly increased.
Both the quick ratio and current ratio for 2006 are lower than 1.0 and have decreased in the past two years. Along with interest coverage ratios that are exceedingly low, the probability that the company will face default has significantly increased.
Both the quick ratio and current ratio for 2006 are above 1.0 and have decreased in the past two years. Along with interest coverage ratios that are exceedingly low, the probability that the company will face default has significantly decreased.
Both the quick ratio and current ratio for 2006 are above 1.0 and have increased in the past two years. Along with interest coverage ratios that are exceedingly high, the probability that the company will face default has significantly decreased.
In: Accounting
Deflation refers to the phenomenon of a negative inflation rate. (In 2004, the inflation rate was negative in Hong Kong and we say Hong Kong suffered deflation in 2004.) Many people regard deflation as bad. Can you explain why? Is deflation sometimes good (at least for some people)?
In: Economics
Deflation refers to the phenomenon of a negative inflation rate. (In 2004, the inflation rate was negative in Hong Kong and we say Hong Kong suffered deflation in 2004.) Many people regard deflation as bad. Can you explain why? Is deflation sometimes good (at least for some people)?
In: Economics
catch me if you can (2002) write a report about catch me if you can (2002) must be 900 words that fully describes the movie including describing the main characters, the fraud situation in the movie, and how the situation plays out. The second part of the paper should discuss the actual persons and/or companies on which the movie focuses: Identify these actual persons / company; identify the type(s) of fraud(s) are alleged in the film; discuss your personal feelings about these people about the film; after doing some research, discuss what has happened to the people / companies featured in the film.
In: Operations Management
On July 1, 2002, Enjoy Toys Company issued $10 million
in 10-year, 12% debenture bonds. Interest is payable semiannually
on January 1 and July 1. Bond discounts and premiums are amortized
by the straight-line method at each interest payment date and at
year-end. The company’s fiscal year ends at December 31.
Required 1. July 1, 2002 to record the issuance of bonds at par
value. 2. Make the necessary entries at December 31, 2002, under
each of the following assumptions: (a)The bonds were issued at 97.
(b)The bonds were issued on 102. *
In: Accounting
Focussing upon current UK macroeconomic issues
With reference to the present situation (March/April 2020) relating to the ‘Covid 19’ Coronavirus which is impacting with extremely adverse effects upon the world health situation and much of the world macroeconomy
Explain in macroeconomic terms how the above virus is impacting upon the following economic sectors:
The UK commercial aerospace sector these typically carrying holiday and business passengers; and the UK retail food supply sector (supermarkets such as Tesco, Sainsbury, ASDA etc).
Focus upon the effects which may be impacting upon the short-run and the longer run viability of these businesses, how ‘Bandwagon’ effects may be impacting upon the sectors and the measures that Government can implement in order to influence these outcomes.
In: Economics
What signs might alert you to a potential professional boundary violation or crossing?
250 words please and no plagiarism. Thanks!
In: Nursing
Write the simplified conservation of momentum equation for boundary layer on a flat plate and explain the physical meaning of each term in the equation.
In: Mechanical Engineering
Toolkit Exercise 10.3
Application of Simon’s Control Systems Model
Consider a change you are familiar with (higher education change).
1. Describe the control processes and measures that were used with the change (i.e., the belief, interactive, boundary, and diagnostic controls). When and how were they used and what was their impact?
a. During the earlier stages of the change initiative
b. During the middle stages of the change initiative
c. During the latter stages of the change initiative
2. Were there forbidden topics in the organization, such as questions related to strategy or core values? Were those limits appropriate and did anyone test those limits by raising controversial questions or concerns? Were small successes celebrated along the way?
3. What changes could have been made with the control processes and measures that would have assisted in advancing the interests of the change?
In: Operations Management
You are Given the Following Information for an OECS country for the years 2005 and 2004:
|
GDP Component (EC$MN) |
2005 |
2004 |
|
Personal consumption |
2949.9 |
2920.4 |
|
Government expenditure |
1098.3 |
933.6 |
|
Investment |
629.7 |
623.4 |
|
Exports of goods and services |
2590.7 |
2538.8 |
|
Imports of goods and services |
2305.2 |
2259.1 |
2.You are told that inflation in 2005 was approximately 2%,what would be your initial estimate of real GDP growth in 2025?Briefly outline the difference between nominal and real GDP.
In: Economics