AA 10-2 Comparative Analysis LO A3

Key figures for Apple and Google follow.

AppleGoogle$ millionsCurrent YearPrior YearCurrent YearPrior YearTotal assets$375,319$321,686$197,295$167,497Total liabilities241,272193,43744,79328,461Total equity134,047128,249152,502139,036

Required:

1.Compute the debt-to-equity ratios for Apple and Google for both the current year and the prior year.

2.Use the ratios we computed in part 1 to determine which company's financing structure is least risky.

3.Is its debt-to-equity ratio more risky or less risky compared to the industry (assumed) average of 0.5 for (a) Apple and (b) Google?