Use the financial statements of Jeryht Bakers Corp.

1. Compute the debt ratio at December 31, 2017.

2. Is Jeryht Bakers Corp.'s ability to pay its liabilities strong or weak? Explain your reasoning.

Jeryht Bakers Corp., a baking supplies chain, reported these summarized figures (in millions):

JERYHT BAKERS CORP.

Income Statement

For the Year Ended December 31, 2017

Net sales .......................$61.6

Cost of goods sold ........... 42.4

Interest expense ................ 0.6

All other expenses ............. 15.0

Net income .................... $ 3.6

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JERYHT BAKERS CORP Balance Sheet December 31 2017 2016 Cash Short-term investments Accounts receivable Inventory Other current assets Total current assets All other assets Total assets 2017 2016 $ 8.8 $ 7.2 8.3 17.4 15.5 4.8 15.711.8 16.6 24.6 21.0 Total liabilities and equity $38.3 $32.1 $ 2.8 0.4 0.5 $1.6 Total current liabilities 0.5 Long-term liabilities 0.4 Total liabilities 8.0 Common shares 0.6 Retained earnings 8.6 5.2 0.8 13.7 11.1 Total equity 20.9 $38.3 $32.1