Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 306 Weeks Ago, 1 Day Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 22 Jul 2017 My Price 13.00

`economic consequences

Assessing economic consequences

Condensed balance sheets for 2007 and 2008 and the 2009 income statement for Goodyear, the world"s largest tire company, are as follows (dollars in millions).

 

2008

2007

Current assets

$ 8,340

$10172

Long-term assets

6886

7019

Total assets

$15226

$17191

Current liabilities

$ 4779

$ 4664

Long-term liabilities

9425

9677

Shareholders’ equity

1022

22611

Total liabilities and shareholders" equity

$15226

$17191

Revenues

$19488

  

Expenses

19565

  

Net loss

$ (77)

  

a. Early in 2009, assume that Goodyear is considering the following transactions. Treat each separately and compute how it would affect the company"s ratios of current assets divided by current liabilities and total liabilities divided by total shareholders" equity.

  1. Purchase $1,000 in inventory on account.
  2. Issue common stock for $2,000 cash.
  3. Refinance a $500 short-term liability with a $500 long-term liability.
  4. Purchase equipment in exchange for a $400 long-term note payable.
  5. Pay a $1,000 short-term debt with cash.

b. Assume that the terms of Goodyear"s long-term debt require the company to maintain a ratio of current assets divided by current liabilities of 1.65. Is this covenant restriction relevant to whether the company should enter into any of the above transactions? Explain.

c. How much cash could Goodyear pay for a long-term investment and still be in compliance with the covenant?

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 06:07 PM My Price 13.00

Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â-----------  -----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------sol-----------uti-----------on.-----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be----------- ca-----------tch-----------

Not Rated(0)