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) (Points : 10)