Using the information for Otis, Inc., in SE 6 and SE 7, compute the debt to equity ratio, return on equity, and the interest coverage ratio for 2011 and 2012. In 2010, total stockholders’ equity was $60,000. Comment on the results.

In SE, The comparative income statements and balance sheets of Otis, Inc., appear below. Compute the amount and percentage changes for the income statements and comment on the changes from 2011 to 2012.

(Round computations to one decimal place.)

Otis, Inc. Comparative Income Statements For the Years Ended December 31, 2012 and 2011 2012 2011 Net sales $360,000 224,000 $136,000 $290,000 176,000 $114,000 Cost of goods sold Gross margin Operating expenses Operating income Interest expense 80,000 $ 56,000 60,000 $ 54,000 14,000 10,000 $ 44,000 $ 42,000 Income before income taxes Income taxes expense 14,000 16,000 $ 28,000 $ 28,000 Net income Eamings per share 2.80 2.80 Otis, Inc. Comparative Balance Sheets December 31, 2012 and 2011 2012 2011 Assets $ 48,000 260,000 $308,000 $ 40,000 Current assets Property, plant, and equipment (net) Total assets 200,000 $240,000 Liabilities and Stockholders' Equity $ 36,000 $ 44,000 Current liabilities Long-term labilities Stockholders'equity Total llabilitles and stockholders'equity 180,000 92,000 $308,000 120,000 76,000 $240,000