The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest,T each company follow . Use them in a ratio analysis that compares the firms' financial leverage and profitabil a. Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability (1) Debt ratio (2) Times interest earned ratio b. Calculate the following profitability ratios for the two companies. Discuss their profitability relative to each othe. (1) Operating profit margin (2) Net profit margin (3) Return on total assets (4) Retum on common equity c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the instead of Pelican's? (Select the best answer below.) O A. Even though Pelican is more profitable (higher net profit margin), Timberland has a higher ROE than Pelican O B. Since Timberland has a higher relative amount of debt, the stockholders' equity is proportionally reduced res Click to select your answer and then click Check Answer. All parts showing Clear All The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest,T each company follow . Use them in a ratio analysis that compares the firms' financial leverage and profitabil a. Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability (1) Debt ratio (2) Times interest earned ratio b. Calculate the following profitability ratios for the two companies. Discuss their profitability relative to each othe. (1) Operating profit margin (2) Net profit margin (3) Return on total assets (4) Retum on common equity c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the instead of Pelican's? (Select the best answer below.) O A. Even though Pelican is more profitable (higher net profit margin), Timberland has a higher ROE than Pelican O B. Since Timberland has a higher relative amount of debt, the stockholders' equity is proportionally reduced res Click to select your answer and then click Check Answer. All parts showing Clear All