Interpreting the debt ratio and return on assets:

a. Calculate the debt ratio and the return on assets using the year-end information for each of the follow¬ ing six separate companies ($ thousands).

b. Of the six companies, which business relies most heavily on creditor financing?

c. Of the six companies, which business relies most heavily on equity financing?

d. Which two companies indicate the greatest risk?

e. Which two companies earn the highest return on assets?

f. Which one company would investors likely prefer based on the risk-return relation?

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XMicrosoft Excel Book! et Format Toch Data Accounting Window Help 100% Arial Case Assets Liabilities Average Assets Net Income 2 Company 1 $90,500 $11,765 $100,000 $20,000 3 Company 2 64,000 46,720 40,000 3,800 4 Company 3 32,500 26,650 50,000 650 5 Company 4 147,000 55,860 200,000 21,000 6 Company 5 92,000 31,280 40,000 7,520 7 Company 6 104,500 52,250 80,000 12,000- Sheetrock has 11