Question: a. Based only on coverage ratios, which company has the highest credit risk? Explain. b. Based only on leverage ratios, which company has the highest

a. Based only on coverage ratios, which company has the highest credit risk? Explain.

b. Based only on leverage ratios, which company has the highest credit risk? Explain.

Company A B EBITDA Margin (%) 25.1 29.6 21.8 Return on Capital (%. 25.0 36.3 16.6 EBIT/Interest Expense (X) 15.9 58.2 8.9 EBITDA Interest Expense (X) 19.6 62.4 12.4 Debt/ EBITDA (% 1.6 0.5 2.5 Debt/ Capital (% 35.2 15.9 46.3

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