a. Calculate the ratio of debt to equity.
b. What are Geomorph’s net working capital and total long-term capital? Calculate the ratio
of debt to total long-term capital.
B. Discuss alternative measures of financial leverage. Should the market value
of equity be used or the book value? Is it better to use the market value of debt or the book
value? How should you treat off-balance-sheet obligations such as pension liabilities? How
would you treat preferred stock?