The following information pertains to Bell and Tower companies at the end of 2013:

Required
a. Compute each company’s debt to assets ratio, current ratio, and times interest earned (EBIT must be computed). Identify the company with the greater financial risk.
b. Compute each company’s return on equity ratio and return on assets ratio. Use EBIT instead of net income when computing the return on assets ratio. Identify the company that is managing its assets more effectively. Identify the company that is producing the higher return from the stockholders’ perspective. Explain how one company was able to produce a higher return on equity than theother.

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Account Title Bell Tower Current assets Total assets Current liabilities Total liabilities Stockholders' equity Interest expense Income tax expense Net income 200,000 20,000 150,000 55,000 13,000 12,500 28,500 30,000 S 30,000 200,000 15,000 110,000 90,000 10,000 12,000 29,100