The following ratios are available for Bachus Inc. and Newton Inc.

Current Debt to Earnings Ratio Assets Ratio per Share Bachus Inc. 2:1 75% $3.50 Newton Inc. 1.5:1 40% $2.75 Compared to Newton Inc., Bachus Inc. has:

(a) higher liquidity, higher solvency, and higher profitability.

(b) lower liquidity, higher solvency, and higher profitability.

(c) higher liquidity, lower solvency, and higher profitability.

(d) higher liquidity and lower solvency, but profitability cannot be compared based on information provided.AppendixLO1