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The Statement Relating to the Debt Ratio of a Company

Question 35

Multiple Choice

The statement relating to the debt ratio of a company that is not true is:


A) It can be calculated by relating liabilities to total funds
B) It is an indicator of a company's long-term solvency
C) It is a measure of the extent of a company's gearing
D) A higher level of debt is normally preferable from a creditor's point of view

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