The following information was obtained from the comparative financial statements included in IBM€™s 2008 annual report. (All amounts are in millions of dollars.)

Required
1. Using the information provided, compute the following for 2008 and 2007:
a. Debt-to-equity ratio (at each year-end)
b. Times interest earned ratio
c. Debt service coverage ratio
d. Cash flow from operations to capital expenditures ratio
2. Comment briefly on the company€™ssolvency.

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December 31, 2008 December 31, 2007 Total liabilities Total stockholders' equity $96,058 $91,962 28,470 13,465 For the Years Ended December 31 Interest expense Provision for income taxes Net income Net cash provided by operating activities 2008 S 673 4,381 12,334 2007 S 611 4,071 10,418 from continuing operations Cash dividends paid Payments for plant, rental machines 18,812 2,585 16,094 2,147 and other property Payments to settle debt 4,171 10,248 4,630 11,306