All of the Following Statements Regarding the Ratio of Liabilities

Multiple Choice

All of the following statements regarding the ratio of liabilities to owner's equity are true except:

A) A ratio of 1 indicates that liabilities equal owner's equity.
B) Corporations can use this ratio but substitute total stockholders' equity for total owner's equity.
C) The higher this ratio is, the better able a business is to withstand poor business conditions and pay creditors.
D) The lower this ratio is, the better able a business is to withstand poor business conditions and pay creditors.