This is Assets/Equity. Is this better higher or lower and why?
Assets = liabilities + equity The lower this is the better since liabilities will be lesser then. Lowest it can get is 1 since liabilities will be 0 then. Liabilities includes debt and stuff which are bad.
nice simple explanation. thanks
Don’t just think of it that way. Leverage makes it possible to earn a greater return on investment. It is just “bad” when it is too high to operate effectively.
Nothing is obvious anymore 
ROE = Profit Margin x Asset turnover x Financial leverage So, REO will be higher, the higher the financial leverage. But note that asset turnover goes down due to higher assets! Still, ROE goes higher b/c TA is in the numerator.
…it depends on the need that have to be met as indicated in question. A firm seeking to increase ROE could use leverage, hence the higher the better. If you are analysing a firm for credit risk or solvency, then the lower the better.