An Improvement in the Proportion of a Company's Assets That

question 54

Multiple Choice

An improvement in the proportion of a company's assets that are financed with debt would be shown by:

• A) an increase in the debt ratio
• B) a decrease in the debt ratio
• C) an increase in the current ratio
• D) a decrease in the current ratio

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Definitions:

Trading Securities

Trading securities are a form of investments that a company plans to buy and sell over a short period of time with the intention of profiting from the market movements.

Realized Gain

The profit made from the sale of an asset, recognized when the asset is actually sold and the transaction is complete.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as a single economic entity.

Voting Shares

Shares of a corporation's stock that grant the shareholder the right to vote on corporate matters, such as the election of the board of directors.