Toys in a Box is a retail toy company. Financial data from the December 31, 2015, and December 31, 2014, financial statements are shown as follows (in thousands):
The income from operations and interest expense from the income statement for both years are as follows:
a. Determine the debt ratio for 2015 and 2014. Round the percentage to one decimal place.
b. Determine the times interest earned ratio for 2015 and 2014. Round to one decimal place.
c. Have the 2015 ratios determined above improved or declined since 2014? Review the financial information presented in the exercise. What might have caused the change in the ratios?