Two Public companies both operate and sell exclusively in Canada. Both companies are direct competitors in the Retail Industry. Below is select Financial Information taken from each company's recent year end Financial Statements. NOTE: L.T.D. stands for Long Term Debt Company 1 Net Income (Earnings) $4,800,000 Depreciation $200,000 Total Assets $10,000,000 Current Liabilities $1,000,000 Shareholder Equity $6,000,000 Income Tax Expense $350,000 Annual L.T.D. Principal Payments $3,800,000 Total Liabilities $8,000,000 Interest Expense on L.T.D. $600,000 Company 2 Net Income (Earnings) $3,700,000 Depreciation $700,000 Total Assets $8,000,000 Current Liabilities $900,000 Shareholder Equity $3,800,000 Income Tax Expense $400,000 Annual L.T.D. Principal Payments $300,000 Total Liabilities $4,000,000 Interest Expense on L.T.D. $200,000 a) Calculate the following 2 ratios for each company: Debt Service Coverage Ratio AND Debt to Equity Ratio (4 Marks) b) If you were the Bank Lender, which company would present the least amount of risk to you and why? (4 Marks) c) Which company has the higher Financial Leverage? Explain why. (3 Marks)