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Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. 1610-9 ERCISE 10.11 Sarety of Creditors' Claims Toyco

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Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. 1610-9 ERCISE 10.11 Sarety of Creditors' Claims Toyco Pemco Total assets . $615,132 $2,780,500 Interest expense Operating income 28,026 39,588 13,028 304,672 a. Compute for each company (1) the debt ratio and (2) the interest coverage ratio. (Round the debt ratio to the nearest percent and the interest coverage ratio to two decimal places.) b. In your opinion, which of these companies would a long-term creditor probably view as the safer investment? Explain

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