Which of the following ratios would be considered favorable if it was low?
A) Total revenues to population.
B) Debt service to total revenues.
C) Capital outlay from operating funds to operating expenditures.
D) Cash and short-term investments to current liabilities.

Question

Quizplus · Accepted Answer

A low Debt service to total revenues ratio indicates that a smaller portion of the entity's revenues is needed to cover debt obligations, which is generally seen as favorable because it suggests that the entity is not overly burdened by its debt.

Which of the Following Ratios Would Be Considered Favorable If