Which of the following best describes the company's current ratio and quick ratio for 2005 and 2004? The current ratio has increased while the quick ratio has decreased in the period from 2004 to 2005, which suggests the company has a shortage of liquid assets. Both the current and quick ratios have decreased from 2004 to 2005. The company is fairly illiquid. The current ratio has decreased while the quick ratio has increased in the period from 2004 to 2005, which suggests the company has a shortage of current assets. Both the current and quick ratios have increased from 2004 to 2005. The company is fairly liquid. Compute and Interpret Liquidity, Solvency and Coverage Ratios Balance sheets and income statements for Lockheed Martin Corporation follow. Refer to these financial statements to answer the requirements. (b) Compute total liabilities-to-equity ratios and total debt-to-equity ratios for 2005 and 2004. (Round your answers to two decimal places.) 2005 total liabilities-to-stockholders' equity = 2004 total liabilities-to-stockholders' equity = 2005 total debt-to-equity = 2004 total debt-to-equity = Which of the following best describes the company's total liabilities-to-equity ratios and total debt-to-equity ratios for 2005 and 2004 ? Both the total liabilities-to-equity and total debt-to-equity ratios have increased from 2004 to 2005 . These increases suggest that the company is less solvent. (c) Compute times interest earned ratio, cash from operations to total debt ratio, and free operating cash flow to total debt ratios. (Round your answers to two decimal places.) 2005 times interest earned = 2004 times interest earned = 2005 cash from operations to total debt = 2004 cash from operations to total debt = 2005 free operating cash flow to total debt = Consolidated Statement of Cash Flows Year Ended December 31 (In millions) 2005 2004 2003 Operating Activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Amortization of purchased intangibles $1,825$1,266$1,053 Deferred federal income taxes Changes in operating assets and liabilities: Receivables (390) (87) (258) Ac Accounts payable Customer advances and amounts in excess of costs incurred (39) 519 (94) Other Net cash provided by operating activities Investing Activities Expenditures for property, plant and equipment 239 288 330 Acquisition of business/investments in affiliated companies Proceeds from divestiture of businesses/Investments in affiliated companies 296 (228) (285) Purchase of short-term investments, net \begin{tabular}{|r|r|r|} \hline 534 & 568 & (13) \\ \hline 3,194 & 2,924 & 1,809 \\ \hline \end{tabular} Other Net cash used for investing activities (865) (769) (687) Financing Activities repayment of long-term debt (564) (91) (821) Issuances of long-term debt (173) (969) \begin{tabular}{|r|} \hline(2,202) \\ \hline 1,000 \\ \hline(175) \\ \hline \end{tabular} Long-term debt repayment and issuance costs Issuances of common stock Repurchases of common stock 406 \begin{tabular}{|r|r|} \hline 164 & 44 \\ \hline(673) & (482) \\ \hline(405) & (261) \\ \hline 2,046) & (2,076) \\ \hline 170 & (1,728) \\ \hline 1,010 & 2,738 \\ \hline 1,180 & $1,010 \\ \hline \end{tabular} Net cash used for financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (1,310) (708) (1,461) \begin{tabular}{|r|r|r|} \hline(462) & (405) & (261) \\ \hline(1,791) & (2,046) & (2,076) \\ \hline 904 & 170 & (1,728) \\ \hline 1,180 & 1,010 & 2,738 \\ \hline$2,084 & $1,180 & $1,010 \\ \hline \end{tabular} 2004 cash from operations to total debt = 2005 free operating cash flow to total debt = 2004 free operating cash flow to total debt = Lockheed Martin's times interest earned decreased significantly during 2005, due to both a decrease in profitability and an increase in interest expense. Lockheed Martin's times interest earned increased significantly during 2005, due to both an increase in profitability and a decrease in interest expense. (d) Summarize your findings in a conclusion about the company's credit risk. Do you have any concerns about the company's ability to meet its debt obligations