The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

What is the firm's TIE?

1. 2.20
2. 2.45
3. 2.72
4. 3.02
5. 3.33

Balance Sheet (Millions of S) Cash and securities Accounts receivable S 2,500 11,500 16,000 S30,000 $20,000 $50,000 Total current assets Net plant and equipment Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities S 9,500 5,500 7,000 $22,000 Long-term bonds Total liabilities Common stock Retained eamings Total common equity Total liabilities and equity S15,000 $37,000 S 2,000 11,000 $13,000 $50,000 Income Statement (Millions of S) Net sales Operating costs except depreciation Depreciation Earnings bef interest and taxes (EBIT) Less interest Earnings before taxes (EBT) Taxes Net income 2015 $87,500 81,813 1,531 S 4,156 1.375 S 2,781 S 1,808 Other data: Shares outstanding (millions) Common dividends Int rate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price 500.00 S632.73 6.25% 35% $43.39