When is the return on assets equal to the return on equity?  a. When the company issues equal amounts of long-term debt and common stock. b. When the company only issues equity to finance its borrowing. c. When the current ratio of the company equals 1. d. When the company issues no dividends for a given time period.

Q: What is the impact of decrease in assets or increase in liabilities resulting in decreases in…

A: when the assets reduces, the profits of the company also tends to fall. there can be no chance of…

Q: Liquidity Ratios: a. Measure the short-term ability of the company to pay its maturing obligations…

A: Liquidity ratios such as current ratio and quick ratio is used to find out the company's ability to…

Q: Which of the statements is Not True about the Financial Expenses Coverage Ratio? a)     Its general…

A: Financial Expense Coverage Ratio - It another word we can also known as interest coverage ratio. It…

Q: How is the short term debt repayment capacity of a company is assessed ? Choose the INCORRECT OPTION…

A: Current ratio is the ratio of current assets to the current liabilities.

Q: a) What was the trend in dividends (if any) for the firm? b) What was the trend in net borrowing…

A: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: debt service ratio measures? A. Profitability of the business B. The impact of debt funding to…

A: Debt service ratio means ratio of operating income available for debt service payments like…

Q: When a company issues (i.e., sells) common shares to investors in exchange for cash, the effect of…

A: When shares are issued in cash then cash is increased by the no. of shares issued multiply be the…

Q: Financial leverage measures how much earnings per share (and ROE) respond to changes in debt. True…

A: A firm can finance its business operations through various sources of capital such as debt and…

Q: A company's current ratio is 2.0. Which of the following actions would lower the current ratio,…

A: Current ratio is one of the liquidity ratio of the business, which shows ratio between current…

Q: One major component of Equity is Retained Earnings. What does Retained Earnings represent? Group of…

A: Retained earnings are undistributed profits of the company and the same is retained for future…

Q: What does tangible common equity reflect? Suppose that a bank has common stock of par value $200m…

A: The measure of calculating a company's financial capability to bear losses is known as the tangible…

Q: Which of the following is one measure of liquidity?   a. Quick ratio   b. Profit margin   c.…

A: Introduction: Liquidity: Liquidity means which can be easily converted in to the cash with in short…

Q: The equity method of accounting for investments requires a.the investment to be increased by the…

A:

Q: 10. Evaluate the below statements: 1. If the ratio of total liabilities to shareholder's equity…

A: Debt-to-Asset Ratio = Total Liabilities / Total Assets Debt-to-Equity Ratio = Total Liabilities /…

Q: M&M Proposition 2 states that the cost of a firm's common stock is directly related to the…

A: solution: As per M&M Proposition 2, the company’s Cost of equity is directly proportional to the…

Q: Super Corp. has an acid test ratio 1.5 to 1.0 which of the following will cause this ratio to…

A: Lets start from basic understanding. Acid test ratio indicates the quick asset in compared to quick…

Q: The Debt to Equity ratio calculation measures Group of answer choices c. How much debt the company…

A: Debt-to-Equity Ratio refers to the relative proportion of debt and equity to finance the assets of…

Q: Which of the following statements is most correct?(a) Working capital measures the company's ability…

A: A high working capital ratio is a sign that the corporation is not capitalizing their surplus cash…

Q: The Debt-equity ratio of a company is 1:2, state giving reasons which of thefollowing would improve,…

A: Debt–to-equity ratio or Debt equity ratio: The debt-to-equity ratio indicates that the company’s…

Q: Which of the following statements is false? a. A firm’s return on equity exceeds its return on…

A: Spreading the financial statement is also referred to as a common-size financial statement. A common…

Q: Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would…

A: The currant ratio is a short term liquidity measure ratio which can be calculated as follows Currant…

Q: refers to the way a company finances itself through some combination of loans, bond sales, preferred…

A: The mix of equity and debt in a business organization is known as the capital structure of the…

Q: which of the following is FALSE regarding a firm's financial statements? Inventory is part of…

A: Financial statements -are the final reports prepared by   management staff of a company to present…

Q: Under what situation will return on equity be higher than return on investment? a. When assets…

A: (a) When assets exceed liabilities:Suppose assets is $ 70,000 and liabilities is $ 50,000 and net…

Q: Assume the following relationships for the Brown Corporation:                        Sales / Assets…

A: Computation of profit margin: Hence, the profit margin is 2.00%.

Q: What is the effect of purchasing treasury stock on a company’s earnings per share and return on…

A: Treasury stock refers to those shares which are repurchased from the existing shares , so this…

Q: hat does it mean when a company has zero net income but its stock price has increased? How do you…

A: Equity method: The equity method is used to record the profit earned by a company by investing in…

Q: a. What is the company's total debt? o. What is the amount of total liabilities and equity that…

A: We are going to pay attention to simply accounting equation i.e. Assets = Shareholder's Fund +…

Q: Which of the following is classified as a financing activity? Receipt of dividend income   Receipt…

A: The statement of cash flows shows a clear picture of the cash position over a particular period of…

Q: Long-term solvency is indicated by a. Current ratio b. Debt/equity ratio c. Operating ratio d. Net…

A: Solvency refers to the company's ability to repay it's debt

Q: The following ratios gauge a bank’s leverage EXCEPT*     Bills Payable to Capital Accounts Capital…

A: Leverage ratio assess the ability of the company (here Bank) to meet its financial obligation. The…

Q: Total interest expenses Total noninterest income Securities gains (losses) Income taxes Dividends to…

A: The net income is the net profit of the company earned during the period. The net income includes…

Q: 39 - Which of the following transactions will cause a change in a company's equity ?    a) Sale of…

A: Owner equity means the amount that belong to the owner of the business.  Any profit will increase…

Q: A. Other things being equal, which company appears to have the better liquidity position in terms of…

A: Financial ratios are those which provide a summary of the accounts of a company and helps an…