Which one of the following has the least effect on a firm's sustainable rate of growth?
A) Capital intensity ratio
B) Profit margin
C) Dividend policy
D) Debt-equity ratio
E) Quick ratio

Question

Quizplus · Accepted Answer

The quick ratio, which measures a company's ability to meet its short-term obligations with its most liquid assets, has the least effect on a firm's sustainable rate of growth compared to the other options. The sustainable growth rate is more directly influenced by factors that affect a company's profitability, reinvestment rate, and financial leverage, such as capital intensity, profit margin, dividend policy, and debt-equity ratio.

Which One of the Following Has the Least Effect on a Firm's