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:

Formal Communication

Communication that follows established protocols and structures, often within organizational settings, such as reports or official meetings.

Electronically

Pertaining to processes or systems that operate via electronic devices or the internet.

Personally

Done in person or by oneself, often implying a direct involvement or interest in a particular matter.

Reframing

The process of changing the perspective or interpretation of a situation or concept to view it in a different light or context.