40) Company A and Company B are in the same industry and have the following ratios.
a b
current ratio:1.2 .89
debt/equity: .20.40
total asset turnover: 1.92.1
Return on Equity: 12.4% 14.8%
Dividend Payout ratio: 25% 10%
Discuss the relative natures of the two companies in terms of risk and return. Identify the more growth-oriented firm and justify your selection. Support your discussion and conclusions by referring to the ratios.