Financial information from fiscal year 2016 for two companies competing in the cosmetics industry The Estee Lauder Company and e.l.f. Beauty Inc.appears in the table below. All dollar values are in thousands.

	Estee Lauder	e.l.f. Beauty
Total assets	$9,223,400	$414,929
Total liabilities	5,636,100	273,867
EBIT	1,626,000	26,095
Interest expense	70,700	16,483

a. Calculate the debt ratio and the times interest earned ratio for each company. In what way are these companies similar in terms of their debt usage, and in what way are they very different?

b. Calculate the ratio of interest expense to total liabilities for each company. Conceptually, what do you think this ratio is trying to measure? Why are the values of this ratio dramatically different for these two firms? Suggest some reasons.