The following financial information is excerpted from the 2012 annual report of Retail Products, Inc. (10 pts.)

Balance Sheet

(in thousands)

	2012	2011
Current assets	$449,195	$433,049
Investments	$32,822	$55,072
Deferred charges	$4,905	$12,769
Property, plant, and equipment, net	$350,921	$403,128
Goodwill	$272,146	$323,643
Assets held for disposal	$6,062	$10,247
	$1,116,051	$1,237,908
Total liabilities	$644,504	$721,149
Total stockholders' equity	$471,547	$516,759
	$1,116,051	$1,237,908

Income Statement

Net sales	$2,020,526	$1,841,738
Cost of goods sold	($2,018,436)	($1,787,126)
Selling and administrative	($300,000)	($250,000)
Interest expense	($40,000)	($30,000)
Net income (loss)	($337,910)	($225,388)

For each year compute the following. 1. Calculate times interest earned (2 pts) 2. Does a times interest earned ratio of less than 1 mean that the firm cannot pay its interest expense? Why? (2 pts) 3. Calculate debt equity ratio (2 pts) 4. Calculate debt to tangible net worth ratio (2 pts). Using plain language, explain what the ratio tells the user and interpret the trend. (2 pts)