Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations in 2008 and Roak in 2005. In 2010, both companies pay 7% interest on their debt to creditors.

The following additional information is available.

Roak Company Clay Company 2010 2009 2008 2010 2009 2008 Total asset turnover . . . . . . . . . 3.1 2.8 3.0 1.7 1.5 1.2 Return on total assets . . . . . . . 9.0% 9.6% 8.8% 5.9% 5.6% 5.3%
Profit margin ratio . . . . . . . . . . 2.4% 2.5% 2.3% 2.8% 3.0% 2.9%
Sales . . . . . . . . . . . . . . . . . . . . $410,000 $380,000 $396,000 $210,000 $170,000 $110,000.

Write a half-page report comparing Roak and Clay using the available information. Your analysis should include their ability to use assets efficiently to produce profits. Also comment on their success in employing financial leverage in 2010.AppendixLO1