All Other Things Equal, in Which of the Following Cases

question 68

Multiple Choice

All other things equal, in which of the following cases would an analyst rank the company most favorably?

• A) The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.
• B) The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio while its asset turnover ratio is the lowest.
• C) The company has the lowest debt-to-assets ratio in the industry as well as the lowest asset turnover ratio while its profit margin ratio is the highest.
• D) The company has the lowest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.

---

Definitions:

Total Revenue

The total income generated from business activities before any expenses are subtracted.

Total Cost

Represents the complete amount of expenses incurred by a business in producing goods or services.

Contribution Margin Per Unit

The selling price of a product minus its variable costs, representing the amount each unit contributes to covering fixed costs and generating profit.

Sales Revenue Per Unit

The amount of money generated from selling one unit of a product, before any expenses are subtracted.