Question

The fiscal 2017 financial statements of Reed Enterprises shows average net operating assets (NOA) of $4,795 million, average net nonoperating obligations (NNO) of $605 million, average total liabilities of $6,330 million, and year-end equity of $5,240 million. The company's 2017 financial leverage (FLEV) is

Answer 1

Answer:

financial leverage = 0.144

Explanation:

given data

average net operating assets = $4,795 million

average net non operating obligations = $605 million

average total liabilities = $6,330 million

year-end equity = $5,240 million

solution

we get here financial leverage that is express as

financial leverage = $\frac{net\ non\ operating\ liability}{net\ operating\ asstes- net\ non\ operating\ liability}$   ....................1

put here value and we get

financial leverage = $\frac{605}{4795-605}$

financial leverage = 0.144