Asked by Nicole Guerrero on Jun 17, 2024
Verified
If a firm's ratio of stockholders' equity/total assets is lower than the industry average and its ratio of long-term debt/stockholders' equity is also lower than the industry average, this would suggest that the firm ________.
A) has more current liabilities than the industry average
B) has more leased assets than the industry average
C) will be less profitable than the industry average
D) has more current assets than the industry average
Stockholders' Equity/Total Assets
A ratio expressing the proportion of a company's assets that are financed by shareholders' equity.
Long-Term Debt/Stockholders' Equity
A financial ratio that measures a company's leverage by comparing its long-term debt to its stockholders' equity.
Current Liabilities
Current liabilities are short-term financial obligations that a company is expected to pay within one year.
- Analyze and compute financial ratios for assessing a company's operational effectiveness.
Verified Answer
Learning Objectives
- Analyze and compute financial ratios for assessing a company's operational effectiveness.
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