At the End of 2013, the Following Information Is Available

question 70

Essay

At the end of 2013, 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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Definitions:

Freudian Interpretation

An analytical method based on Sigmund Freud's theories, primarily involving the unconscious mind's influence on behavior.

Slips of the Tongue

Unintentional errors in speech where the speaker says something other than what they intended, often revealing underlying thoughts or conflicts.

Unconscious Processes

Mental activities well below the level of conscious awareness that influence thoughts, feelings, and behaviors.

Slips of the Tongue

Unintentional errors in speech where words are misused, often revealing unconscious thoughts or feelings.