Interpreting the debt ratio and return on assetsa. Calculate the debt ratio and the return...

Interpreting the debt ratio and return on assets

a. Calculate the debt ratio and the return on assets using the year-end information for each of the following six separate companies ($ thousands).

b. Of the six companies, which business relies most heavily on creditor financing?

c. Of the six companies, which business relies most heavily on equity financing?

d. Which two companies indicate the greatest risk?

e. Which two companies earn the highest return on assets?

f. Which one company would investors likely prefer based on the risk–return relation?