Exhibit 7.5 in your text describes the key financial ratios Standard & Poors analysts use to assess credit risk and assign credit ratings to industrial companies. Those same financial ratios for a single company over time follow. The company was assigned a AAA credit rating three years earlier.

	20X1				20X2
	Q1	Q2	Q3	Q4	Q1	Q2
EBIT interest coverage	23.8	22.1	21.6	20.8	20.6	12.4
EBITDA interest coverage	25.3	26.4	25.6	23.2	22.9	16.5
FFO/Total debt (%)	167.8	150.8	130.7	128.4	80.2	76.2
Free operating cash flow/Total debt (%)	104.1	107.3	103.7	98.6	61.5	45.3
Total debt/EBITDA	0.2	0.2	0.2	0.6	0.8	1.0
Return on capital (%)	35.1	34.3	30.6	28.1	25.9	24.7
Total debt/Capital (%)	6.2	6.8	7.5	15.4	27.2	35.6

Required:

Did the companys credit risk increase or decrease over these six quarters?

What credit rating should be assigned to the company as of Q2 in 20X2?

Which is the quarter from the table above that Standard & Poor's would first consider downgrading this company's credit rating?