Which of the Following Would Be a Sign That a Company

question 122

Multiple Choice

Which of the following would be a sign that a company is overextended in its debt?

• A)A low debt ratio compared to the industry average
• B)A debt-to-net worth ratio of 0.12 to 1
• C)A times-interest-earned ratio that is far below the industry average
• D)A high inventory turnover ratio

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Definitions:

National Debt

The total amount of money that a country's government has borrowed, by various means, to fund its activities beyond its revenues.

Budget Act

A legislative act that governs budgetary allocations and the process of budget creation and approval by a government.

Marginal Tax Rate

Additional taxes paid divided by taxable income.

Liberal Economists

Liberal economists advocate for minimal government intervention in the economy, emphasizing free markets, free trade, and the importance of individual choice and freedoms in economic matters.