Multiple Choice
Which of the following statements is false when describing the debt ratio?
A) A relatively high ratio is desirable.
B) Many factors such as company's age, stability, profitability, and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
C) The ratio might be used to help determine if a company could be capable of increasing its income by going into further debt.
D) It is of use to both internal and external users of accounting information.
E) The dividing line between a high and low ratio varies from industry to industry.
Correct Answer:
Verified
Correct Answer:
Verified
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