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Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or preferred stock during the year. A total of 600 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $.75. The market value of the companys common stock at the end of the year was $27. All of the companys sales are on account.

Heritage Antiquing Services Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,190		$	1,380
Accounts receivable, net		9,500			7,400
Inventory		13,700			11,900
Prepaid expenses		730			520
Total current assets		25,120			21,200
Property and equipment:
Land		9,700			9,700
Buildings and equipment, net		51,232			43,446
Total property and equipment		60,932			53,146
Total assets	$	86,052		$	74,346
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	19,700		$	18,600
Accrued payables		1,080			750
Notes payable, short term		0			170
Total current liabilities		20,780			19,520
Long-term liabilities:
Bonds payable		9,400			9,400
Total liabilities		30,180			28,920
Stockholders' equity:
Preferred stock		1,000			1,000
Common stock		2,000			2,000
Additional paid-in capital		4,000			4,000
Total paid-in capital		7,000			7,000
Retained earnings		48,872			38,426
Total stockholders' equity		55,872			45,426
Total liabilities and stockholders' equity	$	86,052		$	74,346

Heritage Antiquing Services Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	72,000		$	65,000
Cost of goods sold		35,000			33,000
Gross margin		37,000			32,000
Selling and administrative expenses:
Selling expenses		10,900			10,600
Administrative expenses		6,900			6,800
Total selling and administrative expenses		17,800			17,400
Net operating income		19,200			14,600
Interest expense		940			940
Net income before taxes		18,260			13,660
Income taxes		7,304			5,464
Net income		10,956			8,196
Dividends to preferred stockholders		60			360
Net income remaining for common stockholders		10,896			7,836
Dividends to common stockholders		450			450
Net income added to retained earnings		10,446			7,386
Retained earnings, beginning of year		38,426			31,040
Retained earnings, end of year	$	48,872		$	38,426

Required:

Compute the following financial ratios for long-term creditors for this year:

1.	Times interest earned ratio. (Round your answer to 1 decimal place. )

Times interest earned ratio

2.	Debt-to-equity ratio. (Round your answer to 2 decimal places.)

Debt-to-equity ratio

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