Question 1 Which company has the higher operating leverage? A. A firm that buys packaged honey from beekeepers, labels the packages and sells them to local stores and restaurants. B. A firm that develops Android apps on a computer and an Android phone, then sells them in the Google Play store? They both have about the same leverage. Not enough information is provided to answer this question. B Question 2 What two types of ratio analysis (that are covered in Chapter 06) does the Dupont Identity Method ignore? Liquidity Efficiency and Turnover Economic Value Added Price to Earnings Z Score Leverage Margins Sales Growth Question 3 1 pts Firms A and B are comparable competitors (IE: they are "comps" of each other). A has a working capital ratio of 1.4 and B has a working capital ratio of 0.8. Which company has the better liquidity position? Not enough information is provided to answer this question. OA They are roughly equivalent. Question 4 1 pts Firms A and B are comparable competitors (IE: they are "comps" of each other). A has a working capital ratio of 1.4 and B has a working capital ratio of 0.8. Is one of the companies financially unsafe? Choose one of the Yes/No answers, and provide one reason for your choice. 7 No, both are safe. Yes, B is unsafe. Both ratios are well above zero. The unsafe firm has fewer Working Capital Assets than Current Liabilities The unsafe firm has fewer Current Assets than Current Liabilities. Yes. A is unsafe. The unsafe firm has fewer Working Capital Assets than Working Capital Liabilities