Which of the following could indicate bad news?
A)An increase in fixed asset turnover ratio.
B)A decrease in days to sell.
C)A decrease in EPS.
D)A decrease in the debt-to-assets ratio.

Question

Quizplus · Accepted Answer

Earnings per share (EPS)indicates the amount of earnings generated for each share of outstanding common stock;a decrease in EPS could indicate bad news.The fixed asset turnover ratio indicates how much revenue the company generates for each dollar invested in fixed assets;an increase in the fixed asset turnover ratio would be good news.The days to sell indicates how many days,on average,it takes a company to sell its inventory;a decrease in the days to sell would be good news.The debt-to-assets ratio indicates the proportion of total assets that creditors finance;a decreasing debt-to-assets ratio means that the company's financing strategy is less risky.

Which of the Following Could Indicate Bad News