Read the article “Weighing the Balance Sheet” in the April 1, 2002, issue ofBusiness Week.

Required 1. This article explains how to evaluate whether a company has a financially strong balance sheet. What does the author of this article look for when evaluating the debt level carried by companies?

2. The article reports a table showing 12 companies that passed the test for strong balance sheets. Identify the range of the current ratio for these 12 companies and name the company with the highest and the company with the lowest current ratios.

3. What is the range of the return on assets ratio for the 12 companies with attractive numbers according to the article? Identify the company with the highest and the company with the lowest return on assets.

4. Some investors will not buy tobacco or asbestos-related companies even if they have a very strong balance sheet. What risk factor are these investors concerned with so that it is more important for these companies than the level of debt on their balance sheets?