A high debt-to-equity ratio does NOT indicate that the company:
A) is highly geared.
B) is heavily in debt relative to its equity.
C) may be vulnerable to interest rate increases.
D) has a high current ratio.

Question

Quizplus · Accepted Answer

A high debt-to-equity ratio indicates that a company is heavily in debt relative to its equity, which may make it vulnerable to interest rate increases. However, it does not necessarily indicate that the company is highly geared or has a high current ratio.

A High Debt-To-Equity Ratio Does NOT Indicate That the Company