Bathlinks Corporation Has a Debt to Assets Ratio of 73

question 132

Multiple Choice

Bathlinks Corporation has a debt to assets ratio of 73%.This tells the user of Bathlinks's financial statements that

• A)Bathlinks is getting a 27% return on its assets.
• B)there is a risk that Bathlinks cannot pay its debts as they come due.
• C)73% of the assets are financed by the stockholders.
• D)based on this measure, the user should not invest in Bathlinks.

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