Price Printing Co

question 75

Multiple Choice

Price Printing Co.had sales of $10 million,Operating Income of $3 million; After-tax income of $1 million; assets of $8 million; Stockholders' equity of $5 million; and a total debt of $3 million.If we measure Price's financial leverage we would most likely use which of the following ratios from chapter 8?

• A)Debt to equity (60%)and Debt to Sales (30%)
• B)Debt to equity (60%)and equity to assets (62.5%)
• C)Debt to equity (60%)and debt to assets (37.5%)
• D)Equity to assets (62.5%)and after-tax income to debt (33.3%)

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