The Debt Ratio Indicates

question 12

Multiple Choice

The debt ratio indicates:

• A)the ability of the firm to pay its current obligations.
• B)the efficiency of the use of total assets.
• C)the magnification of earnings caused by leverage.
• D)a comparison of liabilities with total assets.
• E)none of the answers are correct.

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Definitions:

Late Payment

A financial term referring to the failure to meet the due date for a payment.

Official Capacity

The function or role that a person holds in an organization or as part of their formal job responsibilities.

Recommendations

Suggestions or advice given based on analysis or expertise aimed at guiding decisions or actions.

Buffer

In communication, a neutral or positive statement used to mitigate the impact of a following negative message.