Analyzing Company Liabilities Powder Corporation has been expanding rapidly and has issued additional debt each year for the last 10 years. The company has disclosed the following financial information:

a. Has Powder’s debt-to-equity ratio increased or decreased over the 4-year period?

b. Has Powder’s times interest earned ratio increased or decreased over the 4-year period?

c. Has Powder’s earnings per share increased or decreased over the 4-year period?

d. From the viewpoint of the bondholders, has the company become a more secure investment or more risky? Explain why.

e. From the viewpoint of the shareholders, has the company become a more desirable investment or a less desirable investment? Explain why.

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2000 Operating income Net income 1999 $200,000 $160,000 1998 1997 $110,000 $ 80.000 206.000 185.000 115,000 76,000 Interest expense 28.000 15,000 7,200 4.000 Total long-term debt outstanding Total owners' equity Number of common shares outstanding 350,000 600.000 187,500 90,000 50,000 400,000 200,000 120,000 150,000 150,000 100,000 100,000