Key comparative figures ($ thousands) for both Best Buy and Circuit City follow.

1. What is the debt ratio for Best Buy in the current year and in the prior year?
2. What is the debt ratio for Circuit City in the current year and in the prior year?
3. Which of the two companies has a higher degree of financial leverage? What does this imply?

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Key Figures Total liabilities Total assets Best Buy Current Year $ 5,845,000 10,294,000 Circuit City Prior Year Current Year $5,230,000 $1.701,948 8,652,000 3,789,382 Prior Year $1.506.565 3,730,526