The Statement Relating to the Debt Ratio of a Company

question 16

Multiple Choice

The statement relating to the debt ratio of a company that is not true is:

• A)It can be calculated by relating liabilities to total funds
• B)It is an indicator of a company's long-term solvency
• C)It is a measure of the extent of a company's gearing
• D)A higher level of debt is normally preferable from a creditor's point of view

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Definitions:

State Court Decisions

Legal judgments and rulings made by courts that are part of a state's judicial system.

Geographic Area

A specific part of the Earth's surface defined by natural or artificial boundaries.

Majority Opinion

The judicial opinion agreed to by more than half of the members of a court, setting out the reasoning upon which the decision is based.

Concurring Opinion

A written opinion by a judge or justice that agrees with the court's majority decision but for different reasons.