Which of the following statements is CORRECT? Group of answer choices An increase in the DSO,...

Which of the following statements is CORRECT? Group of answer choices

An increase in the DSO, other things held constant, could be expected to increase the ROE.

An increase in the DSO, other things held constant, could be expected to increase the total assets turnover ratio.

If two firms have the same ROA, the firm with the most debt can be expected to have the lower ROE.

The ratio of long-term debt to total capital is less likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio.

An increase in a firm's debt ratio, with no changes in its sales or operating costs, could be expected to improve the profit margin.

Expert Solution

The ratio of long-term debt to total capital is less likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio.

The above statement is correct. Other given statements are wrong. An increase in a firm's debt ratio, with no changes in its sales or operating costs, could be expected to lower the profit margin.

jeff jeffy answered 2 years ago

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