At the end of the current year, the following information is available for both West Elm Company and East Park Company.
| West Elm Company | East Park Company |
Total assets | $396,396 | $1,650,000 |
Total liabilities | 178,596 | 1,237,500 |
Total equity | 217,800 | 412,500 |
Required
1. Compute the debt-to-equity ratios for both companies.
2. Comment on your results and discuss what they imply about the relative riskiness of these companies.
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