An increase in which of the following ratios is considered unfavorable?
A) Cash flow yield
B) Current ratio
C) Price/earnings (P/E)ratio
D) Debt to equity ratio

Question

Quizplus · Accepted Answer

An increase in the debt to equity ratio is considered unfavorable as it indicates that the company is relying more on debt financing rather than equity financing, which can lead to higher interest payments and financial risk. A lower debt to equity ratio is generally considered more favorable as it indicates a stronger financial position.

An Increase in Which of the Following Ratios Is Considered