If a Firm Has a Debt to Owners' Equity Ratio

question 1

Multiple Choice

If a firm has a debt to owners' equity ratio of .54 (or 54%) we can conclude that:

• A) it has relied more on debt than equity to finance its operations.
• B) the firm is likely to have trouble paying its short-term debts when they come due.
• C) its total liabilities are less than its owners' equity.
• D) the firm has expenses that are exactly 54% of its gross profit.

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Definitions:

Communicate

The act of exchanging information, ideas, or feelings between two or more entities, either verbally or non-verbally.

UWB

Ultra-Wideband, a wireless communication protocol that uses a very low energy level for short-range, high-bandwidth communications over a large portion of the radio spectrum.

NFC

Near Field Communication (NFC) is a set of communication protocols that allow two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within a few centimeters of each other.

Short-Range Wireless

Wireless communication technologies designed for short distances, such as Wi-Fi, Bluetooth, and NFC, typically used in consumer electronics for connecting devices.