The debt ratio of Braun is 0.9 and the debt ratio of Kemp is 1.0.Based on this information,an investor can conclude:
A)Kemp finances a relatively lower portion of its assets with liabilities than Braun.
B)Kemp has less financial leverage.
C)Braun has higher financial leverage.
D)Kemp has the exact same dollar amount of total liabilities and total assets.
E)Braun has less equity per dollar of assets than Kemp.

Question

Quizplus · Accepted Answer

A debt ratio of 1.0 means Kemp's total liabilities equal its total assets, indicating the same dollar amount for both.

The Debt Ratio of Braun Is 0