Calculating and interpreting long-term liquidity ratios. Data taken from the financial statement of Ericsson, a Swedish manufacturer of cellular phone and related infrastructure equipment, appear below (amounts in millions of Swedish kroner).

For the Year Year 2 Year 3 Year 4 Net Income before Interest and Income Taxes Kr25,020 Kr24,293 Krl7,191 Cash Flow from Operations 7,394 12,925 (10,848)

Interest Expense 2,532 3,041 5,166 On December 31 Year 1 Year 2 Year 3 Year 4 Long-term Debt Krl4,407 Krl9,667 Kr32,298 Kr35,247 Total Liabilities 103,483 115,152 148,895 180,208 Total Shareholders' Equity 57,364 70,320 85,616 109,217

a. Compute the long-term debt ratio and the debt-equity ratio at the end of Year 1 , Year 2, Year 3, and Year 4.

b. Compute the cash flow from operations to total liabilities ratio and the interest coverage ratio for Year 2 through Year 4.

c. How has the long-term liquidity risk of Ericsson changed over this three-year period?