Response to the following problem:
Nokia is a leading global manufacturer of mobile devices and services, and it competes to some extent with both Research In Motion and Apple. Key financial ratios for the current fiscal year follow.
Key Figure Nokia Research In Motion Apple
Return on assets 0.7% 26.8% 19.7%
Debt ratio 58.7% 25.5% 33.4%
Required:
1. Which company is most profitable according to its return on assets?
2. Which company is most risky according to the debt ratio?
3. Which company deserves increased investment based on a joint analysis of return on assets and the debt ratio? Explain.