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  3. below is selected balance sheet and income stateme

Below is selected balance sheet and income statement information from Scott & Company. ...

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Accounting

Below is selected balance sheet and income statement information from Scott & Company.

(in millions)

2014

2012

Cash

$ 1,483.36

$ 1,536.73

Accounts receivable

735.30

1,097.16

Current assets

2,918.33

3,913.56

Current liabilities

6,157.95

3,385.39

Long-term debt

3,611.63

17,620.81

Short-term debt

4,568.83

1,033.96

Total liabilities

26,363.17

23,218.42

Interest expense

1,338.29

1,566.90

Capital expenditures

211.50

1,545.48

Equity

-7,152.90

4,587.67

Cash from operations

185.98

110.89

Earnings before interest and taxes

1,902.84

1,594.84

a. Compute the following liquidity, solvency and coverage ratios for both years.

Current ratio (2014, 2012)

Liabilities-to-equity (2014, 2012)

Times interest earned (2014, 2012)

Cash from operations to total debt (2014, 2012)

Free operating cash flow to total debt (2014, 2012)

b. What is your overall assessment of the companys credit risk? Explain. What differences do you observe between the two years? Please be brief.

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