Green Earth Homes, Inc., builds environmentally sensitive structures. The company's 2020 revenues totalled \$2,785 million. At December 31, 2020 and 2019, the company had \(\$ 643\) million and \(\$ 610\) million in current assets, respectively. Accounts payable at the end of 2018 was \(\$ 195\). The December 31, 2020 and 2019 balance sheets and income statements reported the following amounts:

{Requirements}
1. Describe each of Green Earth Homes, Inc.'s liabilities and state how the liability arose.
2. Evaluate whether the company's ability to pay its long-term debts improved, deteriorated, or remained about the same over the year.
3. Evaluate whether the company's ability to pay its short-term debts improved, deteriorated, or remained about the same over the year.

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At Year-End (in millions) Liabilities and shareholders' equity Current liabilities Accounts payable... 2020 2019 $ 137 $ 181 Accrued expenses. 163 169 Employee compensation and benefits. 51 16 Current portion of long-term debt.. 17 10 Total current liabilities.. 368 376 Long-term debt 1,497 1,326 Post-retirement benefits payable 138 112 Other liabilities... 20 22 Shareholders' equity. 2,027 1,492 Total liabilities and shareholders' equity $4,050 3,328 Year-end (in millions) Cost of goods sold...... $1,885 $2,196