A Company Had Total Assets of $400,000 and a Debt-To-Assets

question 139

Multiple Choice

A company had total assets of $400,000 and a debt-to-assets ratio was 0.35.Which of the following statements is not true?

• A)Total liabilities are $140,000.
• B)The debt-to-assets ratio of 0.35 indicates that the company relies less on equity financing than on debt financing.
• C)If other companies in the same industry are used as benchmarks and report a lower debt-to-assets ratio,this indicates that this company has a more risky financing strategy.
• D)If the ratio this year is lower than it was last year for this company,it indicates that the company is relying less on debt financing this year.