Which of the following statements describing the debt ratio is ?
A) It is of use to both internal and external users of accounting information.
B) A relatively high ratio is always desirable.
C) The dividing line for a high and low ratio varies from industry to industry.
D) Many factors such as a company's age, stability, profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
E) The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

Question

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The Answer of Which of the following statements describing the debt ratio is ?
A) It is of use to both internal and external users of accounting information.
B) A relatively high ratio is always desirable.
C) The dividing line for a high and low ratio varies from industry to industry.
D) Many factors such as a company's age, stability, profitability and cash flow influence the determination of what would be interpreted as a high versus a low ratio.
E) The ratio might be used to help determine if a company is capable of increasing its income by obtaining further debt.

Which of the Following Statements Describing the Debt Ratio Is