The balance sheet for Shaver Corporation reported the following: cash, $13,500; short-term investments, $18,500; net accounts receivable, $52,000; inventories, $57,000; prepaids, $18,500; equipment, $111,000; current liabilities, $57,000; notes payable (long-term), $87,000; total stockholders equity, $126,500; net income, $5,020; interest expense, $7,800; income before income taxes, $10,380.

1.Compute Shavers debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.)

2. Based on these ratios, does it appear Shaver relies mainly on debt or equity to finance its assets?

3. Is it probable that Shaver will be able to meet its future interest obligations?