Which of the Following Statements Is Most Correct

question 64

Multiple Choice

Which of the following statements is most correct?

• A) If Company A has a higher debt ratio than Company B, then we can be sure that A will have a lower times-interest-earned ratio than B.
• B) Suppose two companies have identical operations in terms of sales, cost of goods sold, interest rate on debt, and assets. However, Company A uses more debt than Company B; that is, Company A has a higher debt ratio. Under these conditions, we would expect B's profit margin to be higher than A's.
• C) The ROE of any company which is earning positive profits and which has a positive net worth (or common equity) must exceed the company's ROA.
• D) Statements a, b, and c are true.
• E) Statements a, b, and c are false.

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Definitions:

Political Considerations

Factors involving governmental policies, regulations, and decisions that impact organizational operations and strategies.

Talent Management

A systematic, planned effort to attract, retain, develop, and motivate highly skilled employees and managers.

Total Quality Management

A comprehensive approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.

Workforce Utilization

The effective use of employee skills and abilities in an organization to achieve optimal productivity and efficiency.