The Debt Ratio of Jackson's Shoes Is

question 8

Multiple Choice

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0.Based on this information,an investor can conclude:

• A)Billy's Catering finances a relatively lower portion of its assets with liabilities than Jackson's Shoes.
• B)Billy's Catering has a lower risk from its financial leverage.
• C)Jackson's Shoes has a higher risk from its financial leverage.
• D)Billy's Catering has the exact same dollar amount of total liabilities and total assets.
• E)Jackson's Shoes has less equity per dollar of assets than Billy's Catering.

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Definitions:

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli, arising from their genetic makeup.

Need

A requirement essential for the survival, well-being, or functioning of an organism or the execution of a process.

Incentive

A motivational factor or reward that encourages a person to perform a specific action or exhibit a desired behavior.

Body Mass Index

A measure of body fat based on height and weight that applies to adult men and women.