Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare three fictitious companies (Biltmore, Mackey, and Victory) by calculating the following ratios: current ratio, debt ratio, leverage ratio, and times-interest-earned ratio. Use year-end figures in place of averages where needed for calculating the ratios in this exercise.

Based on your computed ratios, which company looks the least risky?

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A1 Mackey 1 (Amounts in millions or billions) 2 Income data 3 Total revenues 4 Operating income 5 Interest expense 6 Net income 7 Assets and liability data 8 (Amounts in millions or billions) 9 Total current assets 10 Long-term assets 11 Total current liabilities 12 Long-term liabilities 13 Common stockholders' equity 14 Biltmore Victory $ 9,731 292 ¥ 7,313 222 30 12 € 136,253 5,603 41 26 655 441 422 98 5,774 564 160,560 54,154 72,000 110,507 32,207 187 107 226 2,187 2,313 1,838