An Increase in Retained Earnings Will Increase the Debt to Equity

question 32

True/False

An increase in retained earnings will increase the debt to equity ratio.

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Definitions:

Flexible Budget

A budget that adjusts or varies with changes in the volume or activity level of a company, making it more adaptable than a static budget.

Revenue

The total amount of money received by a company from its business activities, like sales of goods or services.

Fixed Cost

A cost that does not change with the increase or decrease in the amount of goods or services produced, such as rent, salaries, and insurance.

Planning Budget

A financial plan that estimates income, expenses, and resources over a period, often used for guiding management decisions.