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

question 36

Essay

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?

Understand the mechanisms of glandular secretion.

Recognize the characteristics and functions of muscle tissue in various contexts.

Understand the structural elements and functions of the plasma membrane.

Describe the resolution limits and applications of light and electron microscopes in cell biology.

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Definitions:

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and attract funds.

Profit Margin

A financial measurement that calculates the percentage of profit a company makes from its total revenue.

Profit Margin

A financial metric expressing the percentage of revenue that exceeds costs and expenses, indicating a company's profitability.

Required Accounting Return

A target return a project or investment must achieve in accounting terms, such as return on investment or return on equity, to be considered viable.