Which of the Following Would Indicate an improvement in a Company's

question 29

Multiple Choice

Which of the following would indicate an improvement in a company's financial position, holding other things constant?

• A) The inventory and total assets turnover ratios both decline.
• B) The debt ratio increases.
• C) The profit margin declines.
• D) The EBITDA coverage ratio declines.
• E) The current and quick ratios both increase.

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Definitions:

Deposited Cash

Cash that has been placed into a bank account or financial institution for safekeeping or to earn interest.

Bond Refunding

The process of retiring existing bonds by issuing new bonds, usually to take advantage of lower interest rates.

Advantageous

Providing a benefit or favor, leading to improvement or an increased chance of success.

Book Value

The net value of an asset or liability recorded on the balance sheet, calculated as its original cost minus any depreciation, amortization, or impairment costs.