Exercise 17-9 Solvency ratios-calculation and analysis L04 Refer the following table. Focus Metals Inc. Comparative Balance Sheet Information November 30 (millions of $) 2020 2019 Cash $ 15 $ 85 Accounts receivable (net) 382 228 Inventory 58 51 Plant and equipment (net) 2,526 2,610 Accounts payable 257 173 Long-term notes payable* 1,690 2,250 Common shares 290 290 Retained earnings 744 261 *90% of the plant and equipment are secured by long-term notes payable. Focus Metals Inc. Income Statement For Year Ended November 30 (millions of $) 2020 2019 Net sales $ 2,550 $1,752 Cost of goods sold 892 682 Gross profit $1,658 $ 1,070 Operating expenses: Depreciation expense $ 86 $ 86 Other expenses 795 572 Total operating expenses 791 Profit from operations $ 867 $ 412 Interest expense 105 139 Income tax expense 43 47 Profit $ 719 $ 226 658 Required: Calculate Focus Metals solvency ratios for 2019 and 2020. (Round the final answers to 2 decimal places.) 2020 % Ratio Debt ratio Equity ratio Pledged assets to secured liabilities Times interest earned 2019 % % % :1 :1 times times Analysis Component: Identify whether the change in each ratio from 2019 to 2020 was favourable or unfavourable. Favourable! Unfavourable Ratio Debt ratio Equity ratio Pledged assets to secured liabilities Times interest earned