As a junior analyst at an investment bank, your boss asks you to analyze the financial statements of two companies and report what you think. One company is a commercial bank and the other is an industrial company. Having studied their financials carefully, several findings came to your attention: a) one of the two firms has a higher return on assets, almost three times as high as the other firm; b) one of the two firms has much higher leverage level, which means it has more debt in terms of the ratio of debt-to-asset; c) one of the two firms have a big amount of bank deposits.

Please explain which firm is more likely to be the firm in scenario (a), (b), and (c)? You need to explain your reasoning, just naming the firm wont earn any credit.

Based only on the reasoning above, which one would you recommend to your boss to invest if you have to recommend one of the two firms, and why ? Again, you must articulate your thoughts. Feel free to make your own assumptions if you think more information is needed.