Using the year-end information for each of the following six separate companies ($ thousands):
 

CaseAssetsLiabilitiesAverage AssetsNet Income
  Company 1$ 90,500$ 11,765   $ 100,000       $ 20,000  
  Company 264,00046,720   40,000       3,800  
  Company 332,50026,650   50,000       650  
  Company 4147,00055,860   200,000       21,000  
  Company 592,00031,280   40,000       7,520  
  Company 6104,50052,250   80,000       12,000  
 
a.Calculate the debt ratio and the return on assets. (Round your debt ratios to 2 decimal places and return on assets to 3 decimal places.)
   Case Debt Ratio ROA

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

b.Of the six companies, which business relies most heavily on creditor financing?
c.Of the six companies, which business relies most heavily on equity financing?
d.Which two companies indicate the greatest risk?
e.Which two companies indicate the greatest risk?
f.Which one company would investors likely prefer based on the risk