Multiple Choice
At the end of the fiscal year for Santos Industrial Machinery, management raised concerns about the company's financial performance. The company's accountants have been asked to analyze the current financial state of the company by using ratio analysis. Santos needs to assess its debt situation with respect to the value of the company. Which of the following, if true, would most strengthen the case that Santos's debt is manageable?
A) Santos has a high profitability ratio.
B) Santos has a high inventory turnover ratio.
C) Santos has a low inventory turnover ratio.
D) Santos has a high debt-to-owners'-equity ratio.
E) Santos has a low debt-to-owners'-equity ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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