A company had total assets of $400,000. The debt-to-assets ratio was 0.35. Which of the following is NOT true?
A) Total liabilities are $140,000.
B) The debt-to-assets ratio of .35 indicates that the company relies less on equity financing than on debt financing.
C) If other companies in the same industry are used as benchmarks and report a lower debt-to-assets ratio, this indicates that this company has a more risky financing strategy.
D) If the ratio this year is lower than it was last year for this company, it indicates that the company is relying

Question

Quizplus · Accepted Answer

The debt-to-assets ratio of 0.35 indicates that the company relies more on equity financing than on debt financing, as only 35% of the assets are financed by debt.

A Company Had Total Assets of $400,000