In one stroke through forced conversion, the balance sheet changes, the debt becomes equity, and the debt disappears. The result is that the debt-to-equity ratio and the debt-to-asset ratio decline.

Question

Quizplus · Accepted Answer

Forced conversion of debt into equity results in a decrease in debt and an increase in equity, causing the debt-to-equity ratio and the debt-to-asset ratio to decline.

In One Stroke Through Forced Conversion, the Balance Sheet Changes