17 Solvency ratios LOS The following financial information regarding Emily's Editors Pty Ltd is available: Total assets Total liabilities Total shareholders' equity 2019 $ 530 000 140 000 390000 2019 Statement of comprehensive income Revenue $ 250 000 Cost of goods sold 125000 Gross profit 125000 Operating expenses 40000 Profits before interest and taxes 85000 Interest expense 10000 Profits before taxes 75000 Income tax expense 25000 Comprehensive income (no tax) 12000 Total comprehensive income $ 62000 REQUIRED a Calculate the following ratios: i debt to assets ii debt to equity iii equity to assets iv times interest earned. b Discuss the solvency of Emily Editors. Does the company rely more on equity or debt to finance its operations? C What is the relation between the first three ratios