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  3. the following data are for the 2016 fiscal year of

The following data are for the 2016 fiscal year of Alphabet, Inc., which is the parent...

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Question

Accounting

The following data are for the 2016 fiscal year ofAlphabet, Inc., which is the parent company ofGoogle, Inc., and Facebook, Inc.All dollar amounts are in thousands.

Account Title

Alphabet, Inc.

Facebook, Inc.

Current assets

$105,408

$34,401

Total assets

? 167,497

64,961

Current liabilities

?? 16,756

2,875

Total liabilities

??? 28,461

5,767

Stockholders’ equity

139,036

59,194   

Interest expense

124

10   

Income tax expense

4,672

2,301

Net income

19,478

10,217

Required

  1. Calculate the EBIT for each company.
    1. Calculate each company’s debt-to-assets ratio, current ratio,and the times-interest-earned ratio.
    2. Calculate each company’s return-on-assets ratio using EBITinstead of net earnings. Calculate each company’s return-on-equityratio using net earnings.
    3. Alphabet reported interest expense of $124 million, beforetaxes. What was its after-tax interest expense in dollars?(Hint: You will need to compute its tax rate by dividingincome tax expense by earnings before taxes, which must becomputed.)

    Answer & Explanation Solved by verified expert
    4.1 Ratings (514 Votes)
    a EBIT of Alphabet Inc Net income Income tax expense Interest expense 19478 4672 124 24274 EBIT of Facebook Inc Net income Income tax expense Interest expense 10217 2301 10 12528 b For Alphabet Inc Debt to assets ratio    See Answer
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