Which of the Statements Below Is FALSE

question 80

Multiple Choice

Which of the statements below is FALSE?

• A)When the current ratio is greater than 1,we are also saying that net working capital is positive as current assets are greater than current liabilities.
• B)Financial leverage ratios deal with long-term solvency and the use of debt as a financing tool.
• C)The debt ratio is total assets minus total equity divided by equity.
• D)Times interest earned equals EBIT divided by interest expense.

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Definitions:

Reacquired

Refers to stock or securities that a company buys back from its shareholders.

Originally Issued

Refers to securities or financial instruments that are sold for the first time to investors.

Stated Value

The nominal value of a share of stock as determined by the issuing company, which may differ from its market value.

Common Stock

Shares entitling their holder to dividends that vary in amount and may even be missed, depending on the fortunes of the company.