Compute Liquidity and Solvency Ratios for Competing FirmsHalliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements.$ millionsCash and equivalentsShort-term investmentsAccounts receivableCurrent assetsCurrent liabilitiesTotal liabilitiesTotal equityEarnings before interest and tax (EBIT)Interest expense, grossa. Compute the following measures for both companies.Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555).1. Current ratio2. Quick ratio3. Times interest earned4. Liabilities-to-equityHAL SLB$2,008 $1,4331,3445,077 7,64511,151 15,7314,658 13,08116,438 33,9219,258 35,4882,393 2,959554537HAL2.28 x1.5 x4.54 x1.69 *SLB1.114 x0.79 x5.79 *0.91 xb. Which company appears more liquid? HALc. Which company appears more solvent? SLB =

Current ratio is a measure of liquidity. It shows whether the entity can pay the short-term debt…

Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions Cash and equivalents Short-term investments. Accounts receivable Current assets Current liabilities Total liabilities Total equity HAL SLB $2,008 $1,433 1,344 5,077 7,645 11,151 15,731 4,658 13,081 16,438 33,921 9,258 35,488 Earnings before interest and tax (EBIT) 2,393 2,959 Interest expense, gross 554 537 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL 2.28 x 1.5 x 4.54 x 1.69 x SLB 1.114 x 0.79 x 5.79 x 0.91 x 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity b. Which company appears more liquid? HAL c. Which company appears more solvent? SLB ✔

Compute Liquidity and Solvency Ratios for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions Cash and equivalents Short-term investments. Accounts receivable Current assets Current liabilities Total liabilities Total equity HAL SLB $2,008 $1,433 1,344 5,077 7,645 11,151 15,731 4,658 13,081 16,438 33,921 9,258 35,488 Earnings before interest and tax (EBIT) 2,393 2,959 Interest expense, gross 554 537 a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL 2.28 x 1.5 x 4.54 x 1.69 x SLB 1.114 x 0.79 x 5.79 x 0.91 x 1. Current ratio 2. Quick ratio 3. Times interest earned 4. Liabilities-to-equity b. Which company appears more liquid? HAL c. Which company appears more solvent? SLB ✔

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 10P

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