All of the Following Statements Accurately Describe the Debt Ratio

question 58

Multiple Choice

All of the following statements accurately describe the debt ratio except.

• A)It is of use to both internal and external users of accounting information.
• B)A relatively high ratio is always desirable.
• C)The dividing line for a high and low ratio varies from industry to industry.
• D)Many factors such as a company's age,stability,profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
• E)The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

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Definitions:

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The method through which individuals learn and adopt the norms, values, behaviors, and social skills appropriate to their society.

Organizational Culture

The shared values, beliefs, norms, and practices that shape the social and psychological environment of a business or organization, influencing behavior and decision-making.

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