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. Review the following financial statements.

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Part 1

Begin by computing the ratios. Start by selecting the formula for the current ratio. Then calculate the current ratios for

Adamson,

Malcomb,

and

Rhodan.

(Enter amounts in millions or billions as provided to you in the problem statement. Round the ratios to two decimal places.)

=

Current ratio

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Data table

(Amounts in millions or billions)	Adamson	Malcomb	Rhodan
Income data
Total revenues	$ 9,676	7,256	135,337
Operating income	239	171	4,586
Interest expense	42	28	672
Net income	24	13	444
Asset and liability data
(Amounts in millions or billions)
Total current assets	435	6,025	167,736
Long-term assets	105	422	50,118
Total current liabilities	187	2,207	72,300
Long-term liabilities	97	2,306	110,697
Common stockholders' equity	256	1,934	34,857

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Requirement

1.

Compare three fictitious companies (Adamson, Malcomb, and Rhodan) by calculating the following ratios: current ratio, debt ratio, leverage ratio, and times-interest-earned ratio. Use year-end figures in place of averages where needed for calculating the ratios in this exercise. Based on your computed ratio values, which company looks the least risky?