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KS and YL Corporation are companies in the electronics industry. Assume that the company do not need to pay taxes. We are provided with the

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KS and YL Corporation are companies in the electronics industry. Assume that the company do not need to pay taxes. We are provided with the relevant information in the table below. Item Sales revenue EBIT KS Corporation $12,000,000 $6,000,000 $4,000,000 $8,000,000 $6,000,000 YL Corporation $12,000,000 $6,000,000 $5,000,000 $10,000,000 $5,000,000 Net income Total assets Total equity (all ordinary shares) Total debt Annual interest $2,000,000 $300,000 $5,000,000 $1,000,000 Based on the information in the table, calculate the following ratios (round your answers to 2 decimal places) (1) Operating profit margin (2 marks) (ii) Return on Common Equity (ROE) (2 marks) (iii) Debt ratio (2 marks) (iv) Time interest earned (2 marks) (v) Comparing the ratio obtained above, discuss which firm has higher financial risk? (4 marks)

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