According to one report, Kraft Foods Inc. sells enough Kool-Aid? mix to make 4,500 litres of the drink every minute during the summer and over 2.5 billion litres each year. Assume at December 31, 2017, the company reported no short-term investments but did report the following amounts (in millions) in its financial statements:

Required:

1. Compute the debt-to-assets ratio and times interest earned ratio (to two decimal places) for 2017 and 2016.

2. Use your answers to requirement 1 to determine whether, in 2017, (a) creditors were providing a greater (or lesser) proportion of financing for Kraft?s assets and (b) Kraft was more (or less) successful at covering its interest costs, as compared to 2016.

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2017 2016 Total Assets Total Liabilities Interest Expense Income Tax Expense Net Income $ 12,940 10,060 260 240 1,040 $ 12,000 9,060 260 245 960