Compute and Interpret Liquidity, Solvency, and Coverage Ratios Selected balance sheet and income statement information for Nordstrom Inc. for 2015 and 2016 follows.

$ millions 2016 2015 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 595 $ 827 Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 2,306 Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,014 5,224 Current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,911 2,800 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,795 3,123 Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 8 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,827 6,805 Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 156 Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,082 861 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871 2,440 Cash from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,451 1,220 Earnings before interest and taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,101 1,323 Required

a. Compute the following liquidity, solvency and coverage ratios for both years.
Current ratio Quick ratio Liabilities-to-equity ratio Total debt-to-equity Times interest earned Cash from operations to total debt Free operating cash flow to total debt

b. What is your overall assessment of the company’s credit risk? Explain. What differences do you observe between the two years?