Streeter & Sons Is a Regional Service Company That Has

question 108

Short Answer

Streeter & Sons is a regional service company that has been in business for a few years, but has not employed a controller or anyone else full-time to keep track of its financial state. The company needs to take a good look at its financial state to determine whether it needs to make any changes in its practices, in order to prevent possible financial meltdown.
Which of the following, if true, would strengthen the case that Streeter & Sons has too much debt?
The company has grown only slowly since its beginning.
The company's customer base has steadily increased in the last few years.
The company is out-competing other similar companies in the area.
The company's current liabilities are higher than its current and fixed assets.
The company has built up a substantial amount of owners' equity.

---

Definitions:

Challenging Goals

Objectives that are ambitious and require substantial effort and planning to achieve, often motivating individuals or teams to improve their performance.

Equity Theory

A theory of motivation that suggests individuals are motivated by their perception of fairness in the distribution of rewards and resources.

Inputs

Anything that people give up, offer, or trade to their organization in exchange for outcomes.

Novel Task

A task or project that is new and not previously encountered, requiring innovative thinking and approaches.