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Company 1 has Profit Margin of 8.2% and a gearing ratio of 67.2%. Company 2 has Profit Margin of 6.3% and a gearing ratio of

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Company 1 has Profit Margin of 8.2% and a gearing ratio of 67.2%. Company 2 has Profit Margin of 6.3% and a gearing ratio of 53.4%. Based on these ratios, what is generally not true about these two companies Company 2 has lower profitability and lower risk Company 1 has high amount of borrowed funds Company 2 has lower profitability and higher risk. Company 1 has higher profitability and higher risk

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