Which of the following is correct regarding transactions and their effect on ratios?
A) Lending agreements often require a company's current ratio to stay above 2.5.
B) Lending agreements often state that a company's debt ratio may not go below a certain threshold.
C) If a company fails to meet one of the loan conditions, it is said to default on its lending agreement.
D) Companies are generally not concerned about how certain transactions will affect their key ratios.
Correct Answer:
Verified
Q164: A current ratio below 1.0 is a
Q167: As a general rule of thumb,a strong
Q170: A low debt ratio is safer than
Q175: To help keep debt ratios within normal
Q184: When analyzing a company's debt ratio:
A) the
Q192: The debt ratio measures a firm's ability
Q200: To analyze a company's financial position,decision makers
Q203: A measure of a company's ability to
Q204: Net working capital:
A)represents the company's ability to
Q208: The debt ratio is computed by dividing:
A)total
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