FOX Company Has a Ratio of (Total Debt/total Assets) That

question 90

Multiple Choice

FOX Company has a ratio of (total debt/total assets) that is above the industry average, and a ratio of (long term debt/equity) that is below the industry average. These ratios suggest that the firm

• A) utilizes assets effectively.
• B) has too much equity in the capital structure.
• C) has relatively high current liabilities.
• D) has a relatively low dividend-payout ratio.
• E) None of the options are correct.

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Definitions:

Budget Deficits

Budget deficits describe the financial situation where a government's expenditures surpass its income, leading to a shortfall that must be financed through borrowing.

Stimulus Package

A set of government measures, typically involving spending and tax cuts, intended to boost economic activity during a downturn.

Great Recession

The severe global economic downturn that occurred from late 2007 through mid-2009, characterized by significant declines in economic activity worldwide.

Automatic Stabilizers

Automatic stabilizers are economic policies and programs, like unemployment insurance and progressive taxation, that automatically adjust to dampen economic fluctuations without additional government action.