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Compute the debt-to-equity ratios for both companies

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Question: At the end of the current year, the following information is available for both West Elm Company and East Park Company.

                                 West Elm Company                 East Park Company

Total assets . . . . . . . . . . $396,396                              $1,650,000

Total liabilities . . . . . . . . 178,596                                   1,237,500

Total equity . . . . . . . . . . 217,800                                     412,500

Required: 1. Compute the debt-to-equity ratios for both companies.

2. Comment on your results and discuss what they imply about the relative riskiness of these companies.

Reference no: EM131534778

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