The following selected information was taken from the financial statements of Krispy Kreme Doughnuts, Inc.

The Company leases equipment and facilities under both capital and operating leases. The approximate future minimum lease payments under non-cancelable (operating) leases as of January 31, 2010, are set forth in the following table:

Rent expense, net of rental income, totaled $9.6 million in fiscal 2010, $11.8 million in fiscal 2009 and $14.8 million in fiscal 2008.Instructions(a) Calculate each of the following ratios for 2010 and 2009.(1) Current ratio.(2) Free cash flow.(3) Debt to total assets ratio.(b) Comment on Krispy Kreme??s liquidity and solvency.(c) Read the company??s note on leases (Note 10). If the operating leases had instead been accounted for like a purchase, assets and liabilities would have increased by approximately $68,000,000. Recalculate the debt to total assets ratio for 2010 and discuss the implications for analysis.

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KRISPY KREME DOUGHNUTS, INC. Balance Sheet (partial) (in thousands) Feb. 1, 2009 Jan. 31, 2010 $ 59,223 $ 75,806 Total current assets Capital assets and other long-term assets 106,053 119,120 $165,276 $194,926 $ 37,673 64,836 $ 39,616 Current liabilities Long-term liabilities 97,555 Total liabilities 137,171 102,509 62,767 Shareholders' equity Total liabilities and shareholders' equity 57,755 $194,926 $165,276 Other information: 2010 2009 $ 10,685 $ 10,679 (503) (4,061) Interest expense Tax expense (benefit) Net loss 575 (157) Cash provided by operations Capital expenditures Cash dividends 19,827 7,967 16,593 4,694 -0- -0-