Question: Below is selected balance sheet and income statement information from Scott & Company. --------- 2014 2012 Cash 1,483.36 - 1,536.73 Accounts receivable 735.40 - 1097.16

Below is selected balance sheet and income statement information from Scott & Company.

--------- 2014 2012

Cash 1,483.36 - 1,536.73

Accounts receivable 735.40 - 1097.16

Current assets 2,918.33 - 3,913.56

Current liabilities 6,157.95 - 3,385.39

Long term debt 3,611.63 - 17,620.81

short term debt 4,568.83 - 1,033.96

total liabilities 26,363.17 - 23,218.42

interest expense 1,338.29 - 1,566.90

Cap ex. 211.50 - 1,545.48

equity (7,152.90) - 4,587.67

cash from operations 185.98 - 110.89

EBIT 1,902.84 - 1,594.84

a. Compute the following liquidity, solvency and coverage ratios for both years.

Current ratio (2014, 2012)

Liabilities-to-equity (2014, 2012)

Times interest earned (2014, 2012)

Cash from operations to total debt (2014, 2012)

Free operating cash flow to total debt (2014, 2012)

b. What is your overall assessment of the companys credit risk? Explain. What differences do you observe between the two years? Please be brief.

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