Let the radius of the larger circle be \( r_1 = OA = 7 \, \text{cm} \).
The area of the larger circle is:
\[
A_1 = \pi r_1^2 = \pi \times 7^2 = 49\pi \, \text{cm}^2.
\]
Step 1:
The diameter \( OD \) of the smaller circle is the same as the radius \( OA \) of the larger circle. Therefore, the radius of the smaller circle is:
\[
r_2 = \frac{OD}{2} = \frac{7}{2} \, \text{cm}.
\]
The area of the smaller circle is:
\[
A_2 = \pi r_2^2 = \pi \times \left( \frac{7}{2} \right)^2 = \pi \times \frac{49}{4} = \frac{49\pi}{4} \, \text{cm}^2.
\]
Step 2:
The ratio of the areas of the smaller and larger circles is:
\[
\frac{A_2}{A_1} = \frac{\frac{49\pi}{4}}{49\pi} = \frac{1}{4}.
\]
Conclusion:
The ratio of the areas of the smaller and larger circles is \( \frac{1}{4} \).