At the end of 2016,the following information is available for ABC Company and XYZ Company:
Required:
1)For each company,calculate the debt to assets ratio and the return on equity ratio.
2)For each company,calculate the return on assets ratio.
3)Which company had a greater level of debt risk? Why?
4)What is financial leverage? Which company is using financial leverage more successfully?

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The Answer of At the end of 2016,the following information is available for ABC Company and XYZ Company:
Required:
1)For each company,calculate the debt to assets ratio and the return on equity ratio.
2)For each company,calculate the return on assets ratio.
3)Which company had a greater level of debt risk? Why?
4)What is financial leverage? Which company is using financial leverage more successfully?

At the End of 2016,the Following Information Is Available for ABC