Chapter 6, Problem 6.18E

Solvency Analyses. The following items are from the financial statements of Tall Oak Company.

Item	2019	2018
Total liabilities	$450,000	$414,000
Total stockholders' equity	634,000	621,000
Net income	63,000	61,000
Tax expense	18,900	18,300
Interest expense	13,500	12,420
Interest paid	12,100	13,660

Compute Tall Oak’s debt-to-equity ratio and interest coverage ratio for 2018 and 2019 Comment on Tall Oak’s solvency and changes in solvency from 2018 to 2019.