All of the Following Statements Accurately Describe the Debt Ratio

question 58

Multiple Choice

All of the following statements accurately describe the debt ratio except.

• 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 a 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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