The following data were taken from the hnancial statements of Mountain Spring Water Co. for December 31, 2002 and 2001:

The income before income tax was \($780,000\) and \($216,000\) for the years 2002 and 2001, respectively.

a. Determine the ratio of liabilities to stockholders equity at the end of each year.
Round to two digits after the decimal place.

b. Determine the number of times the bond interest charges are earned during the year for both years.

c. What conclusions can be drawn from these data as to the company’s ability to meet its currently maturing debts?

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Accounts payable Current maturities of bonds payable Bonds payable, 12%, issued 1995, due 2004 December 31, 2002 $ 200,000 December 31, 2001 $ 400,000 400,000 400,000 1,600,000 2,000,000 Common stock, $1 par value 100,000 100,000 Paid-in capital in excess of par 1,000,000 1,000,000 Retained earnings. 2,860,000 2,400,000