The following information was drawn from the Year 8 balance sheets of two companies: Company Assets = Liabilities + Common Stock + Retained Earnings A 500,000 = 120,000 + 300,000 + 80,000 B 800,000 = 320,000 + 240,000 + 240,000 During Year 8, A Company' net income was $26,600, while B Company' net income was $62,400. Required Compute the debt-to-assets ratio to measure the level of financial risk of both companies. Compare the two ratios computed in Requirement a to identify which company has the higher level of financial risk. Compute the return-on-equity ratio to measure the level of financial risk of both companies. Compare the two ratios computed in Requirement a to identify which company is performing better. Define the term Financial Leverage. Identify the company that is using financial leverage to a greater extent.