Your financial analyst calculated the following ratios for three companies: Boeing Microsoft PG&E Part 1 Cash ratio 0.15 0.1 0.1 Current ratio 1.3 2.5 0.8 Debt ratio 0.9 0.4 0.75 Profit margin 5% 28% 6% Attempt 1/5 for 10 pts. Evaluate the statement "Microsoft is a better company than Boeing and PG&E because of its higher current ratio." O Yes: A higher current ratio means that the company is in a better position to pay off its current liabilities. O Yes: A higher current ratio means that the company has more current assets. O No: The current ratios are not directly comparable, since each company is in a different industry. No: Current assets typically deliver lower returns, so tying up too much money in current assets yields low returns. Submit Part 2 B Attempt 1/5 for 10 pts. What is the most likely reason that Boeing and PG&E have a higher debt ratio than Microsoft? O Boeing and PG&E have more stable cash flows than Microsoft and are thus better suited for debt financing. Microsoft is so profitable that it does not have to borrow much money. Boeing and PG&E own a lot of tangible fixed assets which make it easier to borrow money cheaply. Boeing and PG&E have lower current ratios than Microsoft.