A U.S. company has a subsidiary located in Great Britain. If the British pound is the functional currency and is appreciating relative to the dollar, what will happen to the following ratios after translation? $$\begin{array}{l}
\text { Debt-to-equity } \quad \text { Net profit margin }\
\begin{array} { l c c }
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Higher } & \text { Same } \
\text { C) } & \text { Same } & \text { Same } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}
\end{array}$$

Question

A U.S. company has a subsidiary located in Great Britain. If the British pound is the functional currency and is appreciating relative to the dollar, what will happen to the following ratios after translation? $$\begin{array}{l}
\text { Debt-to-equity } \quad \text { Net profit margin }\
\begin{array} { l c c } 
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Higher } & \text { Same } \
\text { C) } & \text { Same } & \text { Same } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}
\end{array}$$

Quizplus · Accepted Answer

The Answer of A U.S. company has a subsidiary located in Great Britain. If the British pound is the functional currency and is appreciating relative to the dollar, what will happen to the following ratios after translation? $$\begin{array}{l}
\text { Debt-to-equity } \quad \text { Net profit margin }\
\begin{array} { l c c } 
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Higher } & \text { Same } \
\text { C) } & \text { Same } & \text { Same } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}
\end{array}$$

A US Company Has a Subsidiary Located in Great Britain