Bathlinks Corporation Has a Debt to Assets Ratio of 73

question 132

Multiple Choice

Bathlinks Corporation has a debt to assets ratio of 73%.This tells the user of Bathlinks's financial statements that

• A)Bathlinks is getting a 27% return on its assets.
• B)there is a risk that Bathlinks cannot pay its debts as they come due.
• C)73% of the assets are financed by the stockholders.
• D)based on this measure, the user should not invest in Bathlinks.

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Definitions:

Rawlsian Justice

A theory of justice that emphasizes fairness as the most important aspect of an ethical society, often associated with the "veil of ignorance" thought experiment.

Risk Averse

A term describing individuals or entities that prefer to avoid risks, often opting for the option with the most predictable outcome.

Medicaid

A government healthcare program providing medical assistance to low-income individuals and families.

Medicare

A federal health insurance program in the United States for people aged 65 and older, and for some younger people with disabilities.