The extent of financial leverage in a firm Debt ratios measure the proportion of total assets financed by a firm's creditors. Green Caterpillar Garden Supplies Inc. has a debt-to-equity ratio of 3.40, compared to the industry average of 4.08. Its competitor Peaceful Greens and Gardens, however, has a debt-to-equity ratio of 2.72. Eased on what debt-to-equity ratios imply, which of the following statements is true? PG\&G's creditors face higher risk than the average finanicial risk in the industry. PGeG has a greater risk of bankruptey than Green Caterpillar. Green Caterpillar has higher creditworthiness as compared to PG8G. Green Caterpillar has greater financial risk as compared to PGrG but lower than the average financial risk in the industry