At the End of the Fiscal Year for Santos Industrial

question 125

Short Answer

At the end of the fiscal year for Santos Industrial Machinery, management raised concerns about the company's financial performance. The company's accountants have been asked to analyze the current financial state of the company by using ratio analysis.
Santos needs to assess its debt situation with respect to the value of the company. Which of the following, if true, would most strengthen the case that Santos's debt is manageable?
Santos has a high profitability ratio.
Santos has a high inventory turnover ratio.
Santos has a low inventory turnover ratio.
Santos has a high debt to owners' equity ratio.
Santos has a low debt to owners' equity ratio.

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Definitions:

Observational Methods

Research techniques where the researcher watches subjects in their natural environment without interference or manipulation.

Multi-Level Analysis

A statistical method that analyzes data that is nested within multiple levels of a hierarchy, such as individuals within teams.

Sociometry

A quantitative method for measuring social relationships and structures by analyzing the choice and rejection among members within a group or community.

Self-report

A method in research where participants provide data or information about themselves, often through questionnaires or interviews.