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 co \begin{tabular}{|c|c|c|c|c|c|} \hline & & & & & \\ \hline Net earnings & $1,825 & $1,266 & $1,053 & & \\ \hline \multicolumn{6}{|c|}{ Balance Sheet } \\ \hline \multicolumn{4}{|c|}{ December 31 (In millions) } & 2005 & 2004 \\ \hline \multicolumn{6}{|l|}{ Assets } \\ \hline \multicolumn{4}{|l|}{ Cash and cash equivalents } & $2,164 & $780 \\ \hline \multicolumn{4}{|l|}{ Short-term investments } & 429 & 396 \\ \hline \multicolumn{3}{|l|}{ Receivables } & - & 4,579 & 4,094 \\ \hline \multicolumn{3}{|l|}{ Inventories } & & 1,921 & 1,864 \\ \hline \multicolumn{3}{|l|}{ Deferred income taxes } & & 861 & 982 \\ \hline \multicolumn{3}{|l|}{ Other current assets } & & 495 & 557 \\ \hline \multicolumn{3}{|l|}{ Total current assets } & & 10,449 & 8,673 \\ \hline \multicolumn{3}{|c|}{ Property, plant and equipment, net } & & 3,924 & 3,599 \\ \hline \multicolumn{3}{|c|}{ Investments in equity securities } & & 196 & 812 \\ \hline \multicolumn{3}{|l|}{ Goodwill } & & 8,447 & 7,892 \\ \hline \multicolumn{3}{|l|}{ Purchased intangibles, net } & & 560 & 672 \\ \hline \multicolumn{3}{|l|}{ Prepaid pension asset } & & 1,360 & 1,030 \\ \hline \multicolumn{3}{|l|}{ Other assets } & & 2,728 & 2,596 \\ \hline \multicolumn{3}{|l|}{ Total assets } & & $27,664 & $25,274 \\ \hline \multicolumn{6}{|c|}{ Liabilities and stockholders' equity } \\ \hline \multicolumn{4}{|l|}{ Accounts payable } & $1,998 & $1,726 \\ \hline \multicolumn{4}{|c|}{ Customer advances and amounts in excess of costs incurred } & 4,331 & 4,028 \\ \hline \multicolumn{4}{|c|}{ Salaries, benefits and payroll taxes } & 1,475 & 1,346 \\ \hline \multicolumn{4}{|c|}{ Current maturities of long-term debt } & 202 & 15 \\ \hline \end{tabular} 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 = (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 = \begin{tabular}{|c|c|c|c|} \hline Depreciation and amortization & 555 & 511 & 480 \\ \hline Amortization of purchased intangibles & 150 & 145 & 129 \\ \hline Deferred federal income taxes & 24 & (58) & 467 \\ \hline \multicolumn{4}{|l|}{ Changes in operating assets and liabilities: } \\ \hline Receivables & (390) & (87) & (258) \\ \hline Inventories & (39) & 519 & (94) \\ \hline Accounts payable & 239 & 288 & 330 \\ \hline Customer advances and amounts in excess of costs incurred & 296 & (228) & (285) \\ \hline Other & 534 & 568 & (13) \\ \hline Net cash provided by operating activities & 3,194 & 2,924 & 1,809 \\ \hline \multicolumn{4}{|l|}{ Investing Activities } \\ \hline Expenditures for property, plant and equipment & (865) & (769) & (687) \\ \hline Acquisition of business/investments in affiliated companies & (84) & (91) & (821) \\ \hline Proceeds from divestiture of businesses/Investments in affiliated companies & 935 & 279 & 234 \\ \hline Purchase of short-term investments, net & (33) & (156) & (240) \\ \hline Other & 28 & 29 & 53 \\ \hline Net cash used for investing activities & (19) & (708) & (1,461) \\ \hline \multicolumn{4}{|l|}{ Financing Activities } \\ \hline repayment of long-term debt & (413) & (1,369) & (2,202) \\ \hline issuances of long-term debt & - & - & 1,000 \\ \hline Long-term debt repayment and issuance costs & (12) & (163) & (175) \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline Salaries, benefits and payroll taxes & 1,475 & 1,346 \\ \hline Current maturities of long-term debt & 202 & 15 \\ \hline Other current liabilities & 1,422 & 1,451 \\ \hline Total current liabilities & 9,428 & 8,566 \\ \hline Long-term debt & 4,664 & 5,264 \\ \hline Accrued pension liabilities & 2,097 & 1,300 \\ \hline Other postretirement benefit liabilities & 1,277 & 1,236 \\ \hline Other liabilities & 2,331 & 1,887 \\ \hline Stockholders' equity & & \\ \hline Common stock, \$1 par value per share & 432 & 438 \\ \hline Additional paid-in capital & 1,724 & 2,223 \\ \hline Retained earnings & 7,278 & 5,915 \\ \hline Accumulated other comprehensive loss & (1,553) & (1,532) \\ \hline Other & (14) & (23) \\ \hline Total stockholders' equity & 7,867 & 7,021 \\ \hline Total liabilities and stockholders' equity & $27,664 & $25,274 \\ \hline \end{tabular} Consolidated Statement of Cash Flows Year Ended December 31 (In millions) 200520042003 Operating Activities Net earnings $1,825$1,266$1,053 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Amortization of purchased intangibles 555150511145480129