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

(in millions)

Alpha Inc.Omega Ltd.

Income tax expense..................................................... $361$766

Interest expense............................................................... 4801,423

Profit................................................................................. 654948

Total assets................................................................. 24,75037,525

Total current liabilities................................................... 5,97014,109

Total liabilities.............................................................. 16,48531,816

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?