The Liabilities Section of the Company's Most Recent Consolidated Balance

The liabilities section of the company's most recent consolidated balance sheets is provided below:
$\begin{array}{c}\text { King Cotton Company }\\ \text {Consolidated Balance Sheets}\\ \text { (in millions)}\\\begin{array}{llr}\hline && \text { December 31, } \\&\text { Year 2 } & \text { Year 1 } \\ \text { Current liabilities } &\\ \text { Short-term borrowings } &\$250&\$200\\ \text {Accounts payable and other current liabilities } &4,500&4,450\\ \text {Income taxes payable } &\underline{200}&\underline{50}\\ \text {Total current liabilities } &\$4,950&\$4,700\\\\ \text { Long-term debt } &2,700&3,000\\ \text {Other long-term liabilities } &3,800&3,950\\ \text { Deferred income taxes} &1,500&1,400\\\end{array}\end{array}$

-Refer to King Cotton Company.Which one of the liabilities shown in the balance sheets is used in the calculation of the debt-to-equity ratio? If we can assume that the shareholders' equity total remained relatively constant for the two years,how would the ratio change (increase/decrease)from Year 1 to Year 2? What would this say about the company's financial position?