Which of the Following Statements Is TRUE Regarding the Debt

question 146

Multiple Choice

Which of the following statements is TRUE regarding the debt ratio?

• A)The debt ratio focuses on the total liabilities of an organization.
• B)The debt ratio reveals the percentage of a business' assets financed with liabilities.
• C)The debt ratio is used to analyze a business's ability to pay its current obligations as they come due.
• D)Both A and B are true statements regarding the debt ratio.

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Definitions:

Customer Relations

Customer Relations involve the strategies and techniques that businesses use to maintain and enhance interactions and relationships with their customers.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by taking a different action.

Household Production

Economic activities and tasks performed within the home, such as cooking and cleaning, contributing to the family's welfare but not counted in formal GDP.

Sunk Cost

Expenses already paid that cannot be retrieved and should not affect upcoming business choices.