Which of the Following Is Considered a Good/safe Rule-Of-Thumb Debt

question 121

Multiple Choice

Which of the following is considered a good/safe rule-of-thumb debt ratio for businesses?

• A) 1.5 or above
• B) .6 or below
• C) 1.0 or above
• D) .8 or below

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Definitions:

Potential Liability

The possibility of being legally responsible for an action or inaction, which might lead to legal action and financial compensation.

Big Businesses

Large-scale, established companies that have substantial influence in the market and economy.

Strict Liability

Liability regardless of fault. In tort law, strict liability may be imposed on defendants in cases involving abnormally dangerous activities, dangerous animals, or defective products.

Sellers

Individuals or entities that offer goods or services in exchange for compensation.