Exabyte Corporation reported the following subtotals in its 1994 annual report, in thousands of dollars, for the years ending December 31, 1994 and January 1, 1994 (note that these dates still represent two consecutive fiscal years):

December 31 January 1 1994 1994 Total current liabilities $ 45,621 $ 38,318 Long-term obligations 237 454 Total stockholders’ equity 196,907 158,535 Total liabilities and equity $242,765 $197,307 Required

a. Calculate Exabyte’s debt and equity composition ratios (vertical analysis).

b. Which factors indicate that Exabyte has a low risk of default on its long-term debt?

c. What is Exabyte’s apparent debt management strategy?

d. Which other indicators might be used to assess Exabyte’s risk of default?

e. Can the most recent year be compared with the fiscal year ended January 1, 1994? Why would a company change its year-end by a few days? What other information would be helpful in assessing these issues?