Which of the Following Statements Is CORRECT

question 8

Multiple Choice

Which of the following statements is CORRECT?

• A) an increase in a firm's debt ratio, with no changes in its sales or operating costs, could be expected to lower the profit margin.
• B) the ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the dso or the inventory turnover ratio.
• C) if two firms have the same roa, the firm with the most debt can be expected to have the lower roe.
• D) an increase in the dso, other things held constant, could be expected to increase the total assets turnover ratio.
• E) an increase in the dso, other things held constant, could be expected to increase the roe.