Which of the following statements best compares long-term borrowing capacity ratios?
A: The debt/equity ratio is more conservative than the debt ratio.
B: The debt ratio is more conservative than the debt/equity ratio.
C: The debt/equity ratio is more conservative than the debt to tangible net worth ratio.
D: The debt to tangible net worth ratio is more conservative than the debt/equity ratio.
A: The debt/equity ratio is more conservative than the debt ratio.
B: The debt ratio is more conservative than the debt/equity ratio.
C: The debt/equity ratio is more conservative than the debt to tangible net worth ratio.
D: The debt to tangible net worth ratio is more conservative than the debt/equity ratio.
举一反三
- A low debt ratio is safer than a high debt ratio.
- Which one of the following statements is correct? ( ) A: An increase in the depreciation expense will not affect the cash coverage ratio. B: The debt-equity ratio can be computed as 1 plus the equity multiplier. C: Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5. D: If the total debt ratio is greater than .50, then the debt-equity ratio must be less than 1.0.
- The current ratio provides a more conservative measure of aggregate liquidity than quick ratio.( )
- The cash flow ratio is the ratio of ( ) A: net cash inflow to total debt B: gross cash inflow to total debt C: net cash inflow to net debt D: gross cash inflow to net debt
- The<br/>debt ratio is the ratio of total debt divided by total equity.( )