Exercise $2-22$ Interpreting the debt ratio and return on assets LO A$2$ Complete this question by entering your answers in the tabs be

Required $A$

Required C

Calculate the debt ratio and the return on assets. $($Round your debt rat decimal places. Enter all answers in numbers and not in percentages.$)$

$\backslash$table$[[$Case$,$Debt Ratio,ROA$],[\backslash$table$[[$Company$],[1]],0\mathrm{.}13,20\mathrm{.}000$x$],[\backslash$table$[[$Company$],[2]],0\mathrm{.}73,9\mathrm{.}500$x$],[\backslash$table$[[$Company$],[3]],0\mathrm{.}82,1\mathrm{.}300$x$],[\backslash$table$[[$Company$],[4]],0\mathrm{.}38,10\mathrm{.}500$x$],[\backslash$table$[[$Company$],[5]],0\mathrm{.}34,18\mathrm{.}800$x$],[\backslash$table$[[$Company$],[6]],0\mathrm{.}50,15\mathrm{.}000$x$]]$

Presented below is the year$-$end information for six separate companies $($ $ in thousands$).$

$\backslash$table$[[$Case$,$Assets,Liabilities,Average Assets,Net Income$],[$Company $1,$$$90,500,$$$11,765,$$$100,000,$$$20,000],[$Company $2,64,000,46,720,40,000,3,800],[$Company $3,32,500,26,650,50,000,650],[$Company $4,147,000,55,860,200,000,21,000],[$Company $5,92,000,31,280,40,000,7,520],[$Company $6,104,500,52,250,80,000,12,000]]$

a$.$ Calculate the debt ratio and the return on assets.

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 $($based on the debt ratio$)?$

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

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