The following are indicators that the firm has a cash surplus:.
A)Competitors' stock prices are dropping.
B)The firm has a low debt ratio compared to similar firms.
C)The firm has sufficient debt capacity to cover unexpected opportunities or setbacks.
D)Competitors' stock prices are dropping, the firm has a low debt ratio compared to similar firms, and the firm has sufficient debt capacity to cover unexpected opportunities or setbacks.

Question

Quizplus · Accepted Answer

A cash surplus can be indicated by a combination of factors, including competitors' stock prices dropping (indicating the firm is performing better than its competitors), having a low debt ratio compared to similar firms (indicating the firm has less debt to service and more cash on hand), and having sufficient debt capacity to cover unexpected opportunities or setbacks (indicating the firm has access to additional funds if needed). Therefore, the best choice is D.

The Following Are Indicators That the Firm Has a Cash