The following selected information was taken from Barrick Gold Corporation’s (in U.S. millions):
Instructions
(a) Calculate each of the following ratios for 2010 and 2009. Industry ratios are shown in parentheses.
1. Current ratio (2010 2.4:1:1; 2009, 1.9:1) 2. Receivables turnover (2010, 17.6 times; 2009, 19.5 times)
3. Inventory turnover (2010, 3.6 times; 2009, 4.0 times)
4. Debt to total assets (2010, 16.0%; 2009, 17.4%)
5. Times interest earned (2010, 4.6 times; 2009, 16.3 times)
(b) Based on your results in (a), comment on Barrick Gold’s liquidity and solvency.
(c) Barrick Gold has three pages of disclosure in the notes to its statements about pending litigation. Discuss the implications of this information for your analysis.
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