This Ratio Measures the Extent to Which Managers Have Used

question 70

Multiple Choice

This ratio measures the extent to which managers have used borrowed funds to finance investments:

• A)quick ratio
• B)debt-to-assets ratio
• C)current ratio
• D)times-covered ratio
• E)all of these choices are incorrect

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Definitions:

Articles of Incorporation

Legal documents filed with a governmental body to legally document the creation of a corporation.

Capital Surplus

Excess amount received by a company over the par value of its stock, representing additional paid-in capital.

Earned Surplus

The portion of a company's net income that is retained for reinvestment, rather than being distributed as dividends to shareholders.

MBCA

Model Business Corporation Act, a recommendation for state law on corporations, providing a template for corporate governance and operations.