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The following information was drawn from the Year 8 balance sheets of two companies: Liabilities 125,000 360,000 Company Morris! Reeves Assets 500,000 800,000 Required A Required B Complete this question by entering your answers in the tabs below. Company Morris Reeves + Common Stock + + During Year 8, Morris's net income was $33,750, while Reeves's net income was $61,600. Required a. Compute the debt-to-assets ratio to measure the level of financial risk of both companies. b. Compare the two ratios computed in Requirement a to identify which company has the higher level of financial risk. c. Compute the return-on-equity ratio to measure the level of financial risk of both companies. d. Compare the two ratios computed in Requirement a to identify which company is performing better. f. Identify the company that is using financial leverage to a greater extent. Required C Required D 300,000 200,000 Debt to Assets Ratio % %

The following information was drawn from the Year 8 balance sheets of two companies: During Year 8 , Morris's net income was $33,750, while Reeves's net income was $61,600. Required a. Compute the debt-to-assets ratio to measure the level of financial risk of both companies. b. Compare the two ratios computed in Requirement a to identify which company has the higher level of financial risk. c. Compute the return-on-equity ratio to measure the level of financial risk of both companies. d. Compare the two ratios computed in Requirement a to identify which company is performing better. f. Identify the company that is using financial leverage to a greater extent. Complete this question by entering your answers in the tabs below. Compute the debt-to-assets ratio to measure the level of financial risk of both companies

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