Which of the Following Statements Is False with Regard to the Debt

question 186

Multiple Choice

Which of the following statements is false with regard to the debt ratio?

• A)It is of use to both internal and external users of accounting information.
• B)A relatively high ratio is always desirable.
• C)The dividing line for a high and low ratio varies from industry to industry.
• D)Many factors such as the company's age,stability,profitability,and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
• E)The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

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Definitions:

Large Projects

Extensive or significant undertakings that typically require considerable resources, time, and coordination to complete.

International Organization for Standardization

An independent, non-governmental international organization that develops and publishes a wide range of proprietary, industrial, and commercial standards.

Standard Deviations

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean of the set.

Quality

The degree to which a project's deliverables meet the requirements and satisfy the needs for which they were intended, often assessed through quality control and assurance processes.