Mr. Parks has asked you to advise him on the long-term debt-paying ability of Arodex Company. He provides you with the following ratios:

Required
a. Give the implications and the limitations of each item separately and then the collective influence that could be drawn from them about Arodex Company€™s long-term debt position.
b. What warnings should you offer Mr. Parks about the limitations of ratio analysis for the purpose statedhere?

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2009 2008 2007 Times interest eamed Debt ratio Debt to tangible net worth 8.2 40% 80% 6.0 39% 81% 5.5 40% 81%