Compute and Interpret Liquidity, Solvency and Coverage Ratios
Selected balance sheet and income statement information from Verizon Communications Inc. follows.
($ millions) 2016 2015
Current assets $26,395 $22,355
Current liabilities 30,340 35,052
Total debt 108,078 109,729
Total liabilities 220,148 226,333
Equity 24,032 17,842
Earnings before interest and taxes 27,059 33,060
Interest expense 4,376 4,920
Net cash flow from operating activities $22,715 $38,930
Required:
a. Compute the current ratio for each year and discuss any trend in liquidity.
b. What additional information about the numbers used to compute this ratio might be useful in helping you assess liquidity?
Answers: 2
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Compute and Interpret Liquidity, Solvency and Coverage Ratios
Selected balance sheet and income sta...
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