Which of the Following Statements Is CORRECT

question 44

Multiple Choice

Which of the following statements is CORRECT?

• A) The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the
• Inventory turnover ratio.
• B) If two firms have the same ROA, the firm with the most debt can be
• Expected to have the lower ROE.
• C) An increase in the DSO, other things held constant, could be
• Expected to increase the total assets turnover ratio.
• D) An increase in the DSO, other things held constant, could be
• Expected to increase the ROE.
• E) An increase in a firm's debt ratio, with no changes in its sales or
• Operating costs, could be expected to lower the profit margin.

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