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  3. Fundamentals of Financial Management Concise
  4. Quiz 4: Analysis of Financial Statements

If a Firm's Fixed Assets Turnover Ratio Is Significantly Higher

Question 12
True False

If a firm's fixed assets turnover ratio is significantly higher than its industry average,this could indicate that it uses its fixed assets very efficiently or is operating at over capacity and should probably add fixed assets.

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Q 13
Debt management ratios show the extent to which a firm's managers are attempting to magnify returns on owners' capital through the use of financial leverage.
Q 14
The more conservative a firm's management is,the higher its total debt to total capital ratio [measured as (Short-term debt + Long-term debt)/(Debt + Preferred stock + Common equity)] is likely to be.
Q 15
Other things held constant,the higher a firm's total debt to total capital ratio [measured as (Short-term debt + Long-term debt)/(Debt + Preferred stock + Common equity)],the higher its TIE ratio will be.
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