In the Low Earnings Period,too Much in the Capital Structure

question 8

Multiple Choice

In the low earnings period,too much in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

• A)tax
• B)debt
• C)cash
• D)liquid assets
• E)equity

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Definitions:

Deferred Tax Liabilities

Future tax obligations that arise due to temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

Inventories

Commodities ready for disposition in the routine conduct of a company, those in the pipeline for selling, or as consumables or provisions in the course of production or during service provision.

Statement of Financial Position

A financial statement that displays an entity's assets, liabilities, and equity at a specific point in time, providing insight into its financial health.

Investment Property

Real estate property that has been purchased with the intention of earning a return on the investment either through rental income, the future resale of the property, or both.