An Increase in the Current Liabilities to Total Assets Ratio

question 315

Multiple Choice

An increase in the current liabilities to total assets ratio will result in ________.

• A) an increase in risk
• B) a decrease in risk
• C) an increase in profit
• D) a decrease in profit

Determine the importance of having a clear research goal before starting the information-seeking process.

Evaluate the credibility and relevance of sources for research purposes.

Understand the concept of bias in information sources and how to identify it.

Grasp the process of synthesizing information from various sources.

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Definitions:

Equity Multiplier

A financial ratio that measures the portion of a company's assets financed by stockholders' equity, reflecting financial leverage.

Cash Dividends

Payments made by a company out of its profits to its shareholders, usually on a periodic basis.

Percentage of Sales

An approach used to forecast the future financials of a company based on its current sales data and growth assumptions, commonly used in financial modeling.

Dividend Policy

A company's stance on distributing profits back to its shareholders either in the form of dividends or stock repurchase.