When a Higher Than Normal Ratio of Long-Term Debt to Net

question 35

Multiple Choice

When a higher than normal ratio of long-term debt to net worth is coupled with a lower than average ratio of profits to total assets,the company

• A)is highly successful.
• B)is comparable with industry standards.
• C)has a high risk of financial failure.
• D)has a liquidity problem.

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Definitions:

Situation Analysis

Taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization’s marketing plans and the external forces and trends affecting it.

External Forces

Factors outside of an organization that affect its performance, including economic, political, social, and technological influences.

Marketing Plans

Structured outlines that detail strategies, tactics, targeted activities, and allocations of resources for achieving the marketing goals of a business.

Trends

Patterns or tendencies in data indicating a general direction of change in society, technology, market preferences, or other fields over time.