A Company's Debt Ratio Is Increasing Every Year and Currently

question 28

Multiple Choice

A company's debt ratio is increasing every year and currently stands at 0.90.This indicates:

• A)an improving financial position.
• B)an increase in financial risk.
• C)a greater ability to pay current and long-term liabilities.
• D)a company that is going bankrupt.

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Definitions:

UCC

Stands for the Uniform Commercial Code, a set of laws that provide legal rules and regulations governing commercial or business transactions and agreements in the United States.

Assignment

The act of moving ownership, possessions, or duties from one individual to another.

Bilateral Contract

A contractual agreement involving two parties where each promises to perform an act in exchange for the other's act.

Obligor

A person or entity legally obligated to provide a payment or service to another under the terms of a contract.