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The following information pertains to Austin, Incorporated and Huston Company: \table[[Account Title,Austin,Huston],[Current assets,5.75,900,580,900],[Total assets,550,000,620,000],[current...

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Accounting

The following information pertains to Austin, Incorporated and Huston Company:

$\$ table $[[$ Account Title,Austin,Huston $], [$ Current assets, $5 . 75, 900, 580, 900], [$ Total assets, $550, 000, 620, 000], [$ current liabilities, $26, 250, 40, 600], [$ Total liabilities, $290, 000, 483, 500], [$ Stockholdens $^3$ equity, $260, 090, 136, 500], [$ Interest expense, $17, 20, 20, 100], [$ Income tax expense, $34, 400, 30, 200], [$ Net income, $84, 00 >, 85, 800]]$

Required

a $- 1 .$ Compute each company's debt $-$ to $-$ assets ratio, current ratio, and times interest earned $($ EBIT must be computed $) .$

Note: Round your "Debt $-$ to $-$ assets ratlo" and "Times Interest earned" to $1$ decimal place and current ratio answers to $2$ decimal places.

$\$ table $[[,$ Austin,Huston, $], [$ Debt $-$ to $-$ assets ratio,, $95,$ to $1.00], [$ Current ratio,,to $1.00,], [$ Times interest earned,,times, $]]$

a $- 2 .$ Which company has the greater financlal risk?

$\$ table $[[$ Debt $-$ to $-$ assets ratio, $], [$ Current ratio, $], [$ Times interest earned, $]]$

b $.$ Compute each company's return $-$ on $-$ equity ratio and return $-$ on $-$ assets ratlo. Use EBIT instead of net income when computing the return $-$ on $-$ ssets ratio.

Note: Round your answers to $1$ decimal places.

$\$ table $[[,$ Auslin,,Huston $], [$ Return $-$ on $-$ equity,, $% 4,], [$ Return $-$ on $-$ assels,, $%,]]$

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