Response to the following questions:
1. Would a railroad be expected to have a high fixed asset turnover?
2. a. What is financial leverage?
b. What impact does positive leverage have on the rate earned on stockholders' equity compared to the rate earned on total assets?
3. How would the current and quick ratios of a service business compare?
4. What does a decrease in the ratio of liabilities to stockholders' equity indicate about the margin of safety for a firm's creditors and the ability of the firm to withstand adverse business conditions?