Please use the financial ratio data below to answer the following questions. Assume the two firms are in the same industry:

FIRM A FIRM B

Asset Turnover	0.62		Asset Turnover	0.63
Price-earnings Ratio	20		Price-earnings Ratio	15
Current Ratio	1		Current Ratio	0.9
Profit Margin (%)	8.2		Profit Margin (%)	7.9
Financial Leverage	2.5		Financial Leverage	5.5
Times Interest Earned	5		Times Interest Earned	2
Return on Equity (%)	12.7		Return on Equity (%)	27.4

5a. Which firm would you prefer to give a short-term loan? Name the ratio/s you looked at to make your choice.

5b. Which firm would you prefer to give a long-term loan? Name the ratio/s you looked at to make your choice.

5c. Which firm is the most profitable? Name the ratio/s you looked at to make your choice.

5d. According to the DuPont Identity, which ratio is causing Firm Bs ROE to be higher than Firm As ROE?