Given below are summary financial statements for two companies.

Required
A. Compute the debt-to-equity ratios for, and compare the capital structures of, the two companies.
B. Compute and compare the return on equity, return on assets, and financial leverage factors of the two companies.
C. Compute and compare the dividend payout ratios of the two companies.
D. After this analysis, which company would you prefer to invest in andwhy?

2005 2004 2003 Clipper Company: Total assets Total liabilities Net income Dividends 3,273 $,500 4,014 $5,000 3,750 100 25 $6,000 300 75 200 50 Battle Company: Total assets Total liabilities Net income Dividends $7,000 5,333 300 150 $6,000 4,286 $5,000 3,333 100 50 200 100