All other things being equal,in which of the following cases would an analyst rank the company most favorably?
A)The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.
B)The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio while its asset turnover ratio is the lowest.
C)The company has the lowest debt-to-assets ratio in the industry as well as the lowest asset turnover ratio while its profit margin ratio is the highest.
D)The company has the lowest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.

Question

Quizplus · Accepted Answer

A low debt-to-assets ratio indicates a good financial position and lower risk for the company. A high profit margin ratio and asset turnover ratio indicate strong profitability and efficiency. Therefore, a company with the lowest debt-to-assets ratio and highest profit margin and asset turnover ratios would be ranked most favorably by an analyst.

All Other Things Being Equal,in Which of the Following Cases