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Question
Which of the following statements is correct?
a. If Company A has a higher debt ratio than Company B, then we can be sure that A will have a lower times-interest-earned ratio than B.
b. Suppose two companies have identical operations in terms of sales, cost of goods sold, interest rate on debt, and assets. However, Company A uses more debt than Company B; that is, Company A has a higher debt ratio. Under these conditions, we would expect B's profit margin to be higher than A's.
c. The ROE of any company which is earning positive profits and which has a positive net worth (or common equity) must exceed the company's ROA.
d. Statements a, b, and c are all true.
e. Statements a, b, and c are all false.
Answer
This answer is hidden. It contains 11 characters.
Related questions
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Q:
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