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Question 4 Not yet answered Marked out of 5.00 Flag question Question text Calculating Ratios and...

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Calculating Ratios and Estimating Credit Rating
The following data are from Kellogg's 10-K report dated January 2, 2016 ($ millions).

Revenue $13,750

Earnings from continuing operations

 $681
Interest expense 245

Capital expenditures (CAPEX)

 553
Tax expense 208

Total debt

 7,560
Amortization expense 8

Average assets

 15,408
Depreciation expense 526


a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/Interest expenses, Debt/EBITDA, CAPEX/Depreciation Expense.

b. Using the ratios calculated in part a., estimate the credit rating that Moody's might assign to Kellogg. Refer to Exhibit 7.6 in the textbook for ratio definitions and credit ratings.

Round answers to one decimal place (percentage ex: 0.2345 = 23.5%)

Ratio Moody's rating
EBITA/Avg. assets Answer AnswerAaaAaABaaBaBCaaCaC
EBITA margin Answer AnswerAaaAaABaaBaBCaaCaC
EBITA/Int. expense Answer AnswerAaaAaABaaBaBCaaCaC
Debt/EBITDA Answer AnswerAaaAaABaaBaBCaaCaC
CAPEX/Dep. expense Answer AnswerAaaAaABaaBaBCaaCaC
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Based on the given data, pls find below steps, workings and answers (highlighted in yellow):

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