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Three companies A, B, and C have the following financial ratios for the latest fiscal year. A: EBITDA coverage = 10, Profit margin = 10%,
Three companies A, B, and C have the following financial ratios for the latest fiscal year.
A: EBITDA coverage = 10, Profit margin = 10%, Return on assets = 20%;
B: EBITDA coverage = 12, Profit margin = 8%, Return on assets = 10%;
C: EBITDA coverage = 6, Profit margin = 12%, Return on assets = 15%.
Which company has the best capability to service its debt obligations?
A. A
B. B
C. C
D. Cannot tell from these ratios that are given
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