Below is information related to two companies: Company 1Company 2Return on assets 8.2%  6.3%Debt to equity 67.2%  53.4%Based on the ratios above, what is generally true about these two companies?

A. Company 1 has lower profitability and lower risk.
B. Company 1 has higher profitability and lower risk.
C. Company 1 has lower profitability and higher risk.
D. Company 1 has higher profitability and higher risk.


Answer: D

Business

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