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.

Recognize the regulations and practices related to duties and tax rebates in international trade.

Grasp the ethical and legal considerations under the Foreign Corrupt Practices Act in international transactions.

Identify challenges and additional considerations required for offshore sourcing versus domestic sourcing.

Understand the structure and coordination of global purchasing operations.

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Definitions:

Mortgage

A mortgage is a type of loan specifically designed for purchasing real estate where the property itself serves as collateral for the loan until it is paid off.

Investing Activities

Investing activities include transactions involving the acquisition or disposal of long-term assets and investments, which are reflected in the cash flow statement.

Purchase of Land

An accounting transaction involving the acquisition of land, classified as a non-current asset on the balance sheet.

Significant Noncash

Transactions or activities that have a major impact on a company's financial position but do not involve a direct exchange of cash.