CLASS 3 ASSIGNMENTS SET II 3.1: Evaluate debt-paying ability Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare three fictitious companies (Albertson, Millstone, and Raleigh) by calculating the following ratios. (Refer to p. 211-219 for more information on ratios) Current ratio: current assets/current liabilities Debt ratio: Total liabilities/total assets. Debt to Equity (Leverage) ratio: Total debt/ total equity Times-interest-earned ratio: Operating profit/interest expense A1 1 (Amounts in millions or billions) Albertson Millstone Raleigh 2 Income data 3 Total revenues $9,723 7,311 4 Operating income 291 222 5 Interest expense 41 6 Net income 21 1221 136,384 5,584 26 655 16 441 7 Assets and liability data 8 (Amounts in millions or billions) 9 Total current assets 434 4,832 126,700 10 Long-term assets 96 573 68,297 11 Total current liabilities 247 2,237 72,400 12 Long-term liabilities 97 2,303 110,897 13 Common stockholders' equity 186 865 11,700 14 Based on your computed ratios, which company looks the least risky?