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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Compute and interpret liquidity, solvency, and coverage ratios selected balance sheet and income statement information from Calpine Corporation for 2004 and 2006 follows.
($Millions 2004 2005
Cash $1,376.73 $1503.36
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 expenses 1516.90 1,288.29
Capital expenditure 1545.48 211.50
equity 4587.67 (7,152.90)
cash from operation 9.89 155.98
earning before interest $ taxes 1589.84 1877.84
required
a) compute the following liquidity, solvency, and coverage ratios for both years
current ratio, qucik ratio, liabilities- to equity ratio, long term debt-to equity, time interest earned, cash from operation to total debt, free operating cash flows to total debt.
b) what is your overall assessment of the company's credit risk? what difference do you observe between the 2 years?
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