Ratio of Liabilities to Stockholders' Equity and Times Interest Earned

The following data were taken from the financial statements of Starr Construction Inc. for December 31, 20Y6 and 20Y5:

	Dec. 31, 20Y6		Dec. 31, 20Y5
Accounts payable and other liabilities	$224,000		$82,000
Current maturities of bonds payable	300,000		110,000
Serial bonds payable, 10%, issued 2008, due in five years	1,480,000		660,000
Common stock, $5 par value	200,000		130,000
Paid-in capital in excess of par	1,500,000		1,110,000
Retained earnings	3,310,000		3,020,000

The income before income tax was $605,200 and $192,500 for the years 20Y6 and 20Y5, respectively.

a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.

Dec. 31, 20Y6

fill in the blank 1

Dec. 31, 20Y5

fill in the blank 2

b. Determine the times (bond) interest earned during the year for both years. Round to one decimal place.

Dec. 31, 20Y6	fill in the blank 3
Dec. 31, 20Y5	fill in the blank 4 c. What conclusions can be drawn from these data as to the company's ability to meet its currently maturing debts? In 20Y6, the company's ability to meet its currently maturing debts has improved.In 20Y6, the company's ability to meet its currently maturing debts has worsened.No conclusion can be drawn from the data provided.