Which of the following would be generally viewed as a negative change?
A)Earnings per share increases.
B)The debt-to-total assets ratio decreases.
C)The acid test ratio increases.
D)The return on common equity decreases.

Question

Quizplus · Accepted Answer

A decrease in the return on common equity indicates that the company is less profitable and less efficient in generating earnings for its shareholders, which is generally viewed as a negative change. The other options all indicate improvements in financial ratios or metrics, which are generally viewed as positive changes.

Which of the Following Would Be Generally Viewed as a Negative