Using the information for Obras, Inc., in SE 4 and SE 5, compute the debt to equity ratio and the interest coverage ratio for 20x8 and 20x9. Comment on the results. (Round computations to one decimal place.)
Obras, Inc.
Comparative Income Statements
For the Years Ended December 31, 20x9 and 20x8

Obras, Inc.
Comparative Balance Sheets
December 31, 20x9 and 20x8

Liabilities and Stockholders' Equity

20x9 20x8 Net sales Cost of goods sold $360,000 $290,000 176,000 $136,000 $114,000 224,000 Gross margin Operating expenses 60,000 $ 56,000 54,000 10,000 Income before income taxes 42,000 44,000 16,000 $ 28,000 28,000 $ 2.802.80 80,000 Operating income Interest expense 14,000 Income taxes expense Net income Earnings per share 14,000 20x9 20x8 Assets Current assets Property, plant, and equipment (net) Total assets 48,000 40,000 200,000 $308,000 $240,000 260,000 Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity S 36,000 44,000 180,000 120,000 76,000 $240,000 92,000 $308,000