Reference no: EM132740705

Mr. Joseph has identified five different companies in which he is interested in investing, however, he has concerns over the economy and wants to invest in companies with the lowest debt exposure. The following is a list of data for the investments:

Company              Total Assets              Total Liabilities           Net Income
A                           $10,000,000            $1,000,000               $200,000
B                       20,000,000                  3, 000,000             1,000,000
C                      60,000,000                  4,000,000              250,000
D                      15,000,000                  6,000,000               1,600,000
E                     30,000,000                     22,000,000            4,000,000

Problem 1: Calculate the debt-to-asset ratio and rank the investments base on least risky to most risky. Explain the logic of your analysis

Problem 2: Briefly explain the "times earned interest ratio" and how it would be used in your analysis