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The following information was drawn from the balance sheets of two companies. Company East West Required Assets 200,000 Liabilities + 84,000 Equity 116,000 600,000
The following information was drawn from the balance sheets of two companies. Company East West Required Assets 200,000 Liabilities + 84,000 Equity 116,000 600,000 168,000 432,000 a. Compute the debt-to-assets ratio to measure the level of financial risk of both companies. b. Compare the two ratios computed in requirement a to identify which company has the higher level of financial risk. Complete this question by entering your answers in the tabs below. Required A Required B Compute the debt-to-assets ratio to measure the level of financial risk of both companies. Debt to Assets Company Ratio East % West % < Required A Required B >
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