In assessing the debt ratios, analysts customarily vary the standard in relation to the stability of the firm's earnings and cash flows from operations.Public utilities have liabilities to assets ratios frequently on the order of
A)0% to 10%.
B)10% to 20%.
C)30% to 40%.
D)60% to 70%.
E)90% to 100%.

Question

Quizplus · Accepted Answer

Public utilities typically have high liabilities to assets ratios, often in the range of 60% to 70%, due to their stable earnings and cash flows which allow them to carry more debt.

In Assessing the Debt Ratios, Analysts Customarily Vary the Standard