What conclusion can be made from the trends showing in the current ratio and debt ratio?Since the debt ratio is increasing and the current ratio is decreasing, we can conclude that long-term liabilities aretrending higher than non-current assets.O Since the debt ratio is decreasing and the current ratio is increasing, we can conclude that long-term liabilities aretrending lower than non-current assets.O Since the debt ratio is increasing and the current ratio is increasing, we can conclude that long-term liabilities aretrending higher than non-current assets.O Since the debt ratio is increasing and the current ratio is increasing, we can conclude that long-term liabilities aretrending lower than non-current assets.

Debt Ratio Increasing and Current Ratio Decreasing:Debt Ratio is the ratio of total liabilities to…

Answered: What conclusion can be made from the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Give typing answer with explanation and conclusion 27. EFN Define the following: S = Previous year’s sales A = Total assets E = Total equity g = Projected growth in sales PM = Profit margin b = Retention (plowback) ratio Assuming that all debt is constant, show that EFN can be written as EFN = −PM(S)b + [A − PM(S)b] × g Hint: Asset needs will equal A × g. The addition to retained earnings will equal PM(S)b × (1 + g).
When calculating present value, the the interest rate, the smaller the present value amount. smaller larger
A change in money demand or a shift in the money demand curve is caused by a change in * the interest rate. non-interest determinants. cost of borrowing. all of the above
The Profitability Index (PI) is a financial metric that depends only on the Present Value (PV) of expected future cash inflows. This statement is: a False. b Only partly true. c True d Only partly false.
. Suppose interest rates are increasing enough that it can be modeled with r →∞.(a) What is the value of a Call?(b) What is the value of a Put?(c) Explain both answers in terms of finance.
In an inflationary period, what is the difference between (a) inflated dollars and “then-current” future dollars, and (b) “then-current” future dollars and constant-value future dollars?
Convexity is the difference between O actual price change and duration-predicted price change O actual price change and market average price change O actual price change and government bond price change O actual price change and yield to maturity change
How do you justify using a “constant dollar” cash flow analysis when inflation over the period covered in your “constant dollar” cash flow analysis is as good as guaranteed
Why is it important to have a financial benchmark for short-term interest rates?
As inflation increases, the impact of the tilt effect is said to become even more burdensome on borrowers. Why is this so?
When interest rates increase, with all else remaining the same, which of the following is true? Hint: Think about cashflow and timing of exercise. You can also utilize the put-call parity expression. Both calls and puts decrease in value Calls increase in value while puts decrease in value Both calls and puts increase in value O Puts increase in value while calls decrease in value
Contraction risk is the risk that loan principal will be repaid more rapidly than expected, typically when interest rates have increased. Select one: True False

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