Balance Sheet Which of the following statements about financial ratios is true?

A. Generally, investors prefer a low current ratio.

B. A low asset turnover ratio shows that the company is financially stable.

C. The goal of management is to decrease earnings per share over time.

D. A low debt ratio shows that the company will be more likely to pay its debts as they come due.

E. Investors consider a current ratio of 1 to 1.5 to be desirable.

Solutions

Expert Solution

Solution:

The true statement about financial ratio is "A low debt ratio shows that the company will be more likely to pay its debts as they come due"

Hence option D is correct.

ekkarill92 answered 1 year ago

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