Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in the manufacture of craft papers. Some financial statement values for each company follow .

Use them in a ratio analysis that compares the firms' financial leverage and profitability.

Item	Pelican Paper, Inc.	Timberland Forest, Inc.
Total assets	$10,900,000	$10,900,000
Total equity (all common)	9900000	5400000
Total debt	1000000	5500000
Annual interest	100000	550000
Total sales	23000000	23000000
EBIT	5750000	5750000
Earnings available for
common stockholders	3394800	3174000

Discuss their profitability relative to each other.(Select all the answers that apply.)

A.

The return on equity for Pelican is higher than that of Timberland.

B.

Timberland is more profitable than Pelican as shown by the higher net profit margin and return on assets.

C.

The return on equity for Timberland is higher than that of Pelican.

D.

Pelican is more profitable than Timberland as shown by the higher net profit margin and return on assets.