The following information is available from the 2020 financial statements of Sun Inc. and Moon Ltd.:

(in millions)

Sun Inc.Moon Ltd.

Income tax expense $361 $766

Interest expense 480 1,423

Profit 654 948

Total assets 24,750 37,525

Total current liabilities5,970 14,109

Total liabilities 16,485 31,816

Instructions:

(a)Based on the information given, calculate the following ratios for each company:

1.Debt to total assets

2.Interest coverage

(b)What conclusion concerning each company's long-run solvency can be determined from these ratios?