Ratio of liabilities to stockholders' equity and times interest earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $115,000 $181,000 Current maturities of serial bonds payable 250,000 250,000 Serial bonds payable, 10% 1,300,000 1,550,000 Common stock, $1 par value 70,000 80,000 Paid-in capital in excess of par 730,000 740,000 Retained earnings 2,530,000 2,010,000 The income before income tax expense was $558,000 and $488,300 for the current and previous years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round your answers to one decimal place. Current year Previous year b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous year c. The ratio of liabilities to stockholders' equity has improved the previous year. and the number of times bond interest charges were earned has improved from the previous year. These results are the combined result of a larger income before income taxes and lower interest expense in the current year compared to Feedback Check My Work a. Divide total liabilities by total stockholders' equity. b. Divide the sum of income before income tax expense and interest expense by interest expense. c. Consider the relationship of the accounts involved.