Debt Management Ratios

Financial statements for Steele Inc. follow.

Steele Inc.
Consolidated Income Statements
(in thousands except per share amounts)
	2023		2022		2021
Net sales	$7,245,088		$6,944,296		$6,149,218
Cost of goods sold	(5,286,253)		(4,953,556)		(4,355,675)
Gross margin	$1,958,835		$1,990,740		$1,793,543
General and administrative expenses	(1,259,896)		(1,202,042)		(1,080,843)
Special and nonrecurring items	2,617		0		0
Operating income	$701,556		$788,698		$712,700
Interest expense	(63,685)		(62,398)		(63,927)
Other income	7,308		10,080		11,529
Gain on sale of investments	0		9,117		0
Income before income taxes	$645,179		$745,497		$660,302
Provision for income taxes	254,000		290,000		257,000
Net income	$391,179		$455,497		$403,302

Steele Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS		Dec. 31, 2023		Dec. 31, 2022
Current assets:
Cash and equivalents		$320,558			$41,235
Accounts receivable		1,056,911			837,377
Inventories		733,700			803,707
Other		109,456			101,811
Total current assets		$2,220,625			$1,784,130
Property and equipment, net		1,666,588			1,813,948
Other assets		195,342			248,372
Total assets		$4,082,555			$3,846,450
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$250,363			$309,092
Accrued expenses		347,892			274,220
Other current liabilities		15,700			0
Income taxes		93,489			137,466
Total current liabilities		$707,444			$720,778
Long-term debt		650,000			541,639
Deferred income taxes		275,101			274,844
Other long-term liabilities		61,267			41,572
Total liabilities		$1,693,812			$1,578,833
Stockholders' equity:
Preferred stock		$100,000			$100,000
Common stock		89,727			89,727
Additional paid-in capitalcommon stock		128,906			127,776
Retained earnings		2,397,112			2,136,794
		$2,715,745			$2,454,297
Less: Treasury stock, at cost		(327,002)			(186,680)
Total stockholders' equity		$2,388,743			$2,267,617
Total liabilities and stockholders' equity		$4,082,555			$3,846,450

Required:

Using Steele's financial statements as shown above, respond to the following requirements.

1. Compute the five debt management ratios for 2022 and 2023. Round your answers to two decimal places.

	2023	2022
Times interest earned
Debt to equity ratio
Debt to total assets ratio
Long-term debt to equity ratio
Long-term debt to total assets ratio

2. Conceptual Connection: Indicate whether the ratios have changed significantly from 2022 to 2023.

3. Do the ratios suggest that Steele is more or less risky for long-term creditors at December 31, 2023, than at December 31, 2022?