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.

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Definitions:

Central Authority

The main governing body or administrative organization that has the overarching control or oversight within a certain area or field.

Utilitarianism

An ethical theory that posits the greatest happiness of the greatest number should be the guiding principle of conduct.

Compel Citizens

Enforcing or obliging citizens to follow certain laws, regulations, or directives through legal or authoritative means.

Medical Tests

Procedures and examinations conducted to determine the presence of disease or monitor health conditions.