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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