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:

Indirect Ownership Interest

A stake in a company or entity that is not held directly by the owner but through another vehicle, such as ownership of a parent company that owns the entity.

NCI Indirect Ownership Interest

Refers to the portion of equity in a subsidiary attributed to non-controlling interests, based on their indirect ownership stake.

Indirect Ownership Interests

Refers to a situation where an entity owns an interest in another entity through an intermediary rather than directly.

Tiered Corporate Group

A hierarchical structure where a parent company controls subsidiary companies, which in turn may control their own subsidiaries, creating multiple levels of entity relationships.