All other things equal, in which of the following cases would an analyst rank the company most favorably?
A) The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.
B) The company has the highest debt-to-assets ratio in the industry as well as the highest profit margin ratio while its asset turnover ratio is the lowest.
C) The company has the lowest debt-to-assets ratio in the industry as well as the lowest asset turnover ratio while its profit margin ratio is the highest.
D) The company has the lowest debt-to-assets ratio in the industry as well as the highest profit margin ratio and asset turnover ratio.

Question

Quizplus · Accepted Answer

A low debt-to-assets ratio indicates strong financial health and stability, while high profit margin and asset turnover ratios indicate efficient and profitable operations. Therefore, the combination of a low debt-to-assets ratio and high profit margin and asset turnover ratios would be the most favorable for an analyst.

All Other Things Equal, in Which of the Following Cases