Homework: Chapter 3 - Fin. Stat. & Ratio Analysis (HW) Save Score: O of 1 pt 6 of 8 (3 complete) HW Score: 36.25%, 2.9 of 8 pts P3-21 (similar to Question Help The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in the manufacture of craft papers. Some fnancial statement values for each company follow EEB Use them in a ratio analysis that compares the firms' financial leverage and profitability. a. Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability to cover the costs in relation to each other (1) Debt ratio (2) Times interest earned ratio b. Calculate the following profitability ratios for the two companies. Discuss their profitability relative to each other. (1) Operating profit margin (2) Net profit margirn (3) Return on total assets (4) Return on common equity c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the risks that Timberland's investors undertake when they choose to purchase its stock instead of Pelican's? % (Round to one decimal place.) a. The debt ratio for Pelican is