The following information pertains to Bierce Company and Crane, Inc. 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 Bierce Crane Current assets Total assets Current liabilities Total liabilities Stockholders' equity Interest expense Income tax expense Net income S 35,000 350,000 20,000 280,000 70,000 25,000 17,000 31,500 $ 30,000 350,000 20,000 200,000 150,000 18,000 16,000 36,000