Which of the Following Statements Is an Accurate Interpretation of a Debt

question 11

Multiple Choice

Which of the following statements is an accurate interpretation of a debt ratio of .60?

• A) The company has $.60 of current liabilities for every $1.00 of current assets.
• B) The company has $.60 of assets for every $1.00 of liabilities.
• C) The company has $.60 of current assets for every $1.00 of current liabilities.
• D) The company has $.60 of liabilities for every $1.00 of assets.

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Definitions:

Transductive Reasoning

A type of reasoning in which specific cases are used to form a general conclusion, often seen in early childhood cognitive development.

Inductive

A systematic approach where multiple assertions, believed or generally accepted as true, are amalgamated to arrive at a targeted conclusion.

Deductive

A logical process where a conclusion follows necessarily from the stated premises, moving from general principles to specific instances.

Reductive

Pertaining to or employing reduction; often referring to explanations or methods that simplify complex phenomena by breaking them down into their components.