$($a$)$ Compute Lockheed Martin's current ratio and quick ratio for $2016$ and $2015.($Round your answers to two decimal places.$)$

$2016$ current ratio $=$

$2015$ current ratio $=$

$2016$ quick ratio $=$

$2015$ quick ratio $=$ Answer $4$

Which of the following best describes the company's current ratio and quick ratio for $2016$ and $2015?$

The current ratio has increased while the quick ratio has decreased in the period from $2015$ to $2016,$ which suggests the company has a shortage of liquid assets.

Both the current and quick ratios have decreased from $2015$ to $2016$ however, the company is liquid.

Both the current and quick ratios have increased from $2015$ to $2016,$ meaning the company is liquid.

The current ratio has decreased while the quick ratio has increased from $2015$ to $2016,$ which suggests the company has a shortage of current assets.

$($b$)$ Compute total liabilities$-$to$-$equity ratios and total debt$-$to$-$equity ratios for $2016$ and $2015.($Round your answers to two decimal places.$)$

$2016$ total liabilities$-$to$-$stockholders' equity $=$

$2015$ total liabilities$-$to$-$stockholders' equity $=$

$2016$ total debt$-$to$-$equity $=$

$2015$ total debt$-$to$-$equity $=$

Which of the following best describes the company's total liabilities$-$to$-$equity ratios and total debt$-$to$-$equity ratios for $2016$ and $2015?$

The total liabilities$-$to$-$equity ratio has decreased while the total debt$-$to$-$equity ratio has increased in the period from $2015$ to $2016,$ which suggests the company has decreased the use of short$-$term debt financing.

The total liabilities$-$to$-$equity ratio has increased while the total debt$-$to$-$equity ratio has decreased in the period from $2015$ to $2016,$ which suggests the company has increased the use of short$-$term debt financing.

Both the total liabilities$-$to$-$equity and total debt$-$to$-$equity ratios have increased from $2015$ to $2016.$ These increases suggest that the company is less solvent.

Both the total liabilities$-$to$-$equity and total debt$-$to$-$equity ratios have decreased from $2015$ to $2016.$ The difference between these two measures reveals that any solvency concerns would be for the short run.

$($c$)$ Compute times interest earned ratio, cash from operations to total debt ratio, and free operating cash flow to total debt ratios. $($Round your answers to two decimal places.$)$

$2016$ times interest earned $=$

$2015$ times interest earned $=$

$2016$ cash from operations to total debt $=$

$2015$ cash from operations to total debt $=$

$2016$ free operating cash flow to total debt $=$

$2015$ free operating cash flow to total debt $=$

Which of the following describes the company's times interest earned, cash from operations to total debt, and free operating cash flow to total debt ratios for $2016$ and $2015?($Select all that apply$)$

Lockheed Martin's free operating cash flow to total debt ratio slightly decreased over the year $2016$ due to decreased cash flow from operations.

Lockheed Martin's times interest earned decreased during $2016,$ due an increase in interest expense.

Lockheed Martin's cash from operations to total debt ratio slightly increased over the year $2016$ due to a decrease in total debt.

Lockheed Martin's times interest earned increased during $2016,$ due to an increase in profitability.

$($d$)$ Summarize your findings in a conclusion about the company's credit risk. Do you have any concerns about the company's ability to meet its debt obligations? Choose yes or No

Lockheed Martin's total debt$-$to$-$equity is low, thus increasing any immediate solvency concerns. The company's ability to meet its debt requirements will depend on increasing short$-$term debt.

Lockheed Martin's quick ratio is low, thus increasing immediate solvency concerns. The company's ability to meet its debt requirements will depend on liquidating inventories for emergency cash.

Lockheed Martin's times interest earned ratio is strong, thus lessening any immediate solvency concerns. The company's ability to meet its debt requirements will depend on its continued profitability.

Lockheed Martin's total liabilities$-$to$-$equity is high, thus lessening any immediate solvency concerns. The company's ability to meet its debt requirements will depend on its use of equity financing.