Exercise $3-23$A $($Static$)$ Using ratio analysis to assess financial risk LO $3-5$

The following information was drawn from the balance sheets of two companies.

Company Assets $=$ Liabilities $+$ Equity

East $200,00084,000116,000$

West $600,000168,000432,000$

Required

Compute the debt$-$to$-$assets ratio to measure the level of financial risk of both companies.

Compare the two ratios computed in requirement a to identify which company has the higher level of f