Small Business Management Study Set 2
Quiz 10: Financial Statements
To Determine the Debt Ratio, the Total Debt Is Divided
To determine the debt ratio, the total debt is divided by the total assets.
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Liquidity represents the degree to which a firm can meet maturing short-term debt obligations with available working capital.
Using more debt can increase the owner's return on equity but it also increases risk.
A conventional measure of a firm's liquidity is a comparison of current assets to current liabilities.
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