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Question 335 - CTFA discussion

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Palo Alto Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This means that the company:

A.
Will not experience any difficulty with its creditors
Answers
A.
Will not experience any difficulty with its creditors
B.
Has less liquidity than other firms in the industry
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B.
Has less liquidity than other firms in the industry
C.
Will be viewed as having high creditworthiness
Answers
C.
Will be viewed as having high creditworthiness
D.
Has greater than average financial risk when compared to other firms in its industry
Answers
D.
Has greater than average financial risk when compared to other firms in its industry
Suggested answer: D
asked 16/09/2024
Luyanda Hatta
34 questions
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