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The following information pertains to Austin, Inc. and Huston Company Account Title Current assets Total assets Current liabilities Total liabilities Stockholders' equity Interest expense Income

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The following information pertains to Austin, Inc. and Huston Company Account Title Current assets Total assets Current liabilities Total liabilities Stockholders' equity Interest expense Income tax expense Net income Austin $ 45,000 430,000 15,750 230,000 200,000 16,000 32,000 72, Bee Huston $ 65,000 500,000 32,500 391,000 109, eee 18,500 29,000 73,000 Required a-1. Compute each company's debt-to-assets ratio, current ratlo, and times interest earned (EBIT must be computed). (Round your "Debt-to-assets ratio" and "Times Interest earned" to 1 decimal place and current ratio answers to 2 decimal places.) Austin Huston Debt-to-assets ratio Current ratio Times interest earned 9 to 1.00 to 1.00 times tirnos Drou 57 Neyt a-2. Which company has the greater financial risk? Debt-to-assets ratio Current ratio Times interest earned b. Compute each company's return-on-equity ratio and return-on-assets ratlo. Use EBIT instead of net income when computing the return-on-assets ratio. (Round your answers to 1 decimal places.) Austin Huston 9 Rotum-on-oquity Rotum on-assets Prey 6 of 7 Next >

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