On January 1, 2011, a Company Has Assets of $16

question 21

Multiple Choice

On January 1, 2011, a company has assets of $16 billion and stockholders' equity of $8 billion. On January 1, 2012, the same company has assets of $20 billion and stockholders' equity of $9 billion. During 2011, the
Company had total sales revenue of $9 billion and total expenses of $7 billion. The company's debt -to-assets ratio on January 1, 2012 is:

• A) 0.55
• B) 0.45
• C) 0.035
• D) 0.01

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Definitions:

Razorblade Strategy

A business model where the initial product is sold at a low price, and profit is generated from selling complementary goods.

Market Share

A measure of the percentage of sales within a market that is held by one product or company.

Survival Pricing

A pricing strategy adopted by companies to set prices at a level that covers basic costs, aiming to maintain business operations during adverse conditions.

Business-to-Consumer

A business model where products or services are sold directly from a company to individual consumers.