Use the Following Information for the Question(s)that Follow

question 3

Multiple Choice

Use the following information for the question(s) that follow.
Company X and Company Y are in the same industry and have the following ratios.
-Based on the information above, we can conclude that

• A)company Y is more financially conservative than company X.
• B)company Y is more liquid than company X.
• C)company Y is reinvesting a higher percentage of its earnings in the business than company X.
• D)company Y is using assets less efficiently than company X.

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Definitions:

Redeemed

Refers to the buyback or repayment of a security such as a bond at its maturity date.

Premium

An amount paid in addition to the standard or nominal cost, often associated with insurance or the additional amount above the par value for securities.

IFRS Accounting

The practice of maintaining financial records and reporting financial results in accordance with the International Financial Reporting Standards.

U.S.GAAP

U.S.GAAP (United States Generally Accepted Accounting Principles) comprises a broad set of accounting standards developed by the Financial Accounting Standards Board (FASB) used for preparing financial statements in the U.S.