The following information is taken from the financial statements of the Eastern Oil Company for the year ending December 31, 1978 and 1979.

On the basis of this information, assess the relative

(a) profitability,

(b) liquidity,

(c) solvency of the firm as between 1978 and 1979. Assume that the balances in the asset and equity accounts at year-end approximate the average balances during the period. Also assume an income tax rate of 48 percent.

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Eastern Oil Company Consolidated Statement of Financial Position ASSETS Cash Receivables (Net) Inventories Plant and Equipment (Net) Other Noncurrent Assets Total Assets.. EQUITIES (in millions of dollars) December 31, December 31, 1979 $ 921.0 1,198.3 1,676.0 11,930.4 4,589.5 $20,315.2 1978 $ 866.1 1,173.2 1,566.0 11,305.3 4,331.2 $19,241.8 Current Liabilities Long-Term Liabilities Capital Stock (average shares outstanding in 1979: 224,100,000; in 1978: 221,000,000)... Retained Earnings Total Equities. $ 3,329.7 5,392.6 2,640.5 $ 3,240.1 5,051.0 2,608.4 8,952.4 8,342.3 $20,315.2 $19,241.8