A high ratio of stockholders' equity to total liabilities indicates a greater risk for creditors.

Name: A high ratio of stockholders' equity to total liabilities indicates a greater risk for creditors.
Brand: Quizplus
Rating: 4.7 (36 reviews)

Question

Quizplus · Accepted Answer

A high ratio of stockholders' equity to total liabilities indicates that a company has a strong financial position and is less risky for creditors. This is because the company has a larger cushion of assets that can be used to pay off debts in the event of financial difficulties.

A High Ratio of Stockholders' Equity to Total Liabilities Indicates