Assessing Credit Worthiness Year end financial information is provided below for two companies that make baseball caps.
|
Cobb Industries |
Cobb Industries |
|||
|
(In millions) |
2004 |
2003 |
2004 |
2003 |
|
Property, plant, and equipment |
$283 |
$314 |
$171 |
$162 |
|
Total assets |
392 |
424 |
259 |
246 |
|
Current liabilities |
67 |
74 |
69 |
63 |
|
Long term debt |
261 |
264 |
100 |
104 |
|
Stockholders’ equity |
64 |
86 |
90 |
79 |
|
Asset impairment charge |
18 |
— |
— |
— |
|
Operating income |
5 |
7 |
24 |
19 |
|
Interest expense |
23 |
24 |
8 |
7 |
Required Study the information provided. If you were a creditor of these companies, would you be concerned about the ability of either company to repay its debts? Explain your answer.