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Below is selected balance sheet and income statement information from Scott & Company.
| (in millions) | 2014 | 2012 |
| Cash | $ 1,483.36 | $ 1,536.73 |
| Accounts receivable | 735.30 | 1,097.16 |
| Current assets | 2,918.33 | 3,913.56 |
| Current liabilities | 6,157.95 | 3,385.39 |
| Long-term debt | 3,611.63 | 17,620.81 |
| Short-term debt | 4,568.83 | 1,033.96 |
| Total liabilities | 26,363.17 | 23,218.42 |
| Interest expense | 1,338.29 | 1,566.90 |
| Capital expenditures | 211.50 | 1,545.48 |
| Equity | -7,152.90 | 4,587.67 |
| Cash from operations | 185.98 | 110.89 |
| Earnings before interest and taxes | 1,902.84 | 1,594.84 |
a. Compute the following liquidity, solvency and coverage ratios for both years.
Current ratio (2014, 2012)
Liabilities-to-equity (2014, 2012)
Times interest earned (2014, 2012)
Cash from operations to total debt (2014, 2012)
Free operating cash flow to total debt (2014, 2012)
b. What is your overall assessment of the companys credit risk? Explain. What differences do you observe between the two years? Please be brief.
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