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Question
Price Printing Co. had sales of $10 million, operating income of $3 million, after-tax income of $1 million, assets of $8 million, stockholders' equity of $5 million, and a total debt of $3 million. If we measure Price's financial leverage, we would most likely use which of the following ratios from chapter 8?A.Debt-to-equity (60%) and debt-to-sales (30%)
B.Debt-to-equity (60%) and equity-to-assets (62.5%)
C.Debt-to-equity (60%) and debt-to-assets (37.5%)
D.Equity-to-assets (62.5%) and after-tax income-to-debt (33.3%)
Answer
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