Multiple Choice
At Sips and Chips, a local cybercafé, a financial manager has calculated the debt-to-equity ratio and discovered it is equal to one. What does this indicate about Sips and Chips?
A) It is relying exclusively on debt financing to meet its long-term financing needs.
B) It is relying on equal amounts of debt and equity financing.
C) It has an equal amount of current assets and current liabilities.
D) It is at risk of being unable to pay its short-term debts when they come due.
Correct Answer:
Verified
Correct Answer:
Verified
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