The following information pertains to Waydes Fish Tanks and Theresas Critter Control at the end of 2016:

ACCOUNT TITLE WAYDES FISH THERESAS CRITTER

TANKS CONTROL

Current Assets	$ 45,000	$ 45,000
Total Assets	800,000	800,000
Current Liabilities	78,000	57,000
Total Liabilities	675,000	500,000
Stockholders Equity	125,000	300,000
Interest Expense	62,000	45,000
Income Tax Expense	69,000	75,500
Net Income	105,000	115,000

Compute each companys debt to asset ratio, current ratio and times interest earned (EBIT must be computedEarnings Before Interest and Taxes). Identify the company with the greater financial risk.

Compute each companys return on equity ratio and return on assets ratio. Use EBIT instead of net income when computing the return on assets ratio. Identify the company that is managing its assets more effectively. Identify the company that is producing the higher return from the stockholders perspective. Explain how one company was able to produce a higher return on equity than the other.