Using the information for Obras, Inc., in SE 4 and SE 5, compute the debt to equity ratio and the interest coverage ratio for 20x6 and 20x7. Comment on the results. (Round computations to one decimal place.)

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Obras, Inc. Comparative Income Statements For the Years Ended December 31, 20x7 and 20x6 20x7 20x6 Net sales $360,000 $290,000 Cost of goods sold 224,000 176,000 Gross margin $136,000 $114,000 Operating expenses 80,000 60,000 Operating income $ 56,000 $ 54,000 Interest expense 14,000 10,000 Income before income taxes $ 42,000 $ 44,000 Income taxes expense 14,000 16,000 Net income $ 28,000 $ 28,000 Earnings per share $ 2.80 $ 2.80