The following data were taken from the financial statements of Starr Construction Inc. for December 31, 20Y6 and 20Y5:

The income before income tax was $2,816,000 and $2,640,000 for the years 20Y6 and 20Y5, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year.
b. Determine the times (bond) interest 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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Dec. 31, 20Y6 Dec. 31, 20Y5 Accounts payable and other liabilities Current maturities of bonds payable Serial bonds payable, 896, issued 2008, due in fi e years Common stock, $5 par value Paid-in capital in excess of par Retained earnings $2,325,000 500,000 5,500,000 250,000 1,500,000 7,500,000 $ 1,700,000 500,000 5,000,000 10,250,000