Some financial data for three companies and industry norm are displayed below

Measure	companyA	company b	company C	Industry norm
deb ratio	20%	15%	35%	25%
time interest earned	11 times	9 times	6 times	9 times
price earnings ratio	12 times	10 times	5 times	10 times

: REQUIRED:

a) Which company appears to be using too much debt in its financing mix?

b) Which company appears to be employing debt to the most appropriate degree?

c) Which explanation can you provide for the higher price-earnings ratio enjoyed by company A as compared with company B?