All categories

3 years ago

What does it mean if a company has a debt ratio of 101.5%?

Business

1 answer:

7nadin3 [17]3 years ago

6 0

Explanation:

Debt ratio is basically the ratio between the total debts and the total assets of a company. It shows the percentage of total debts of the company in accordance or in comparison of the total assets. If the debt ratio is high, it means the company has more liabilities than the assets. Higher debt ratio may lead a company towards default.

In this question, 101.5% debt ratio means the total liabilities of the company are 1.5% more than the total assets of the company. This shows that the company's debt ratio is high. Liabilities are more than the assets. In this situation, a company is considered at a risk if precautionary measures are not taken immediately.

You might be interested in

Less than 18 percent of voluntary customer contributions in a recent year went to renewable energy development in the duke power

Mnenie [13.5K]

Answer:

Option C. Greenwashing

Explanation:

The reason is that the company has labelled its products with the green technology or environment friendly product, which it is not. So the perception of customers who buy environment friendly products are now not reluctant to purchase the company products who has deceived the people by saying that their product is environment friendly product. So the correct option is option C.

Example:

ExxonMobil in the past has said that it has successfully reduced its green house gas emission but in fact, they increased green house gas emissions in the year. So they were trying to increase their sales by deceiving people that they are moving towards environment friendly operations.

3 0

3 years ago

Real-world economies get hit with lots of shocks to aggregate demand and real shocks. Categorize each scenario as an aggregate d

Reil [10]

Answer:

a) Decrease LRAS

b) Decrease LRAS

c) Increase AD

d) Increase AD

Explanation:

steel workers go on strike so less steel is produced : this will cause a decrease in the log run aggregate supply of steel in the economy

A tornado destroys factories in Louisiana.: this will cause a decrease in the log run supply of factory products and by-products in the economy

Consumer optimism increases.leads to an increase in the aggregate demand curve

The stock market rallies to 52-week highs increasing consumer wealth. this will definitely lead to an increase in the aggregate demand curve because with more money to spend the demand curve will increase

7 0

3 years ago

Period costs are a.classified as direct labor, direct material, or factory overhead b.not involved in the production process c.f

goldfiish [28.3K]

Answer:

Not involved In the production process

Eg. Selling expenses or advertising expenses

3 0

3 years ago

There are some liabilities, such as income tax payable, for which the amounts must be estimated. Failure to estimate these amoun

LenaWriter [7]

Answer: D. Matching principle

Explanation:

The matching principle simply states that organizations or businesses should recognize both the revenues that the company makes and their related expenses that are incurred by the company in same accounting period.

The main idea behind the matching concept is so that earnings that are made by a business will not be misstated.

3 0

3 years ago

Mutual savings banks are primarily regulated by

ziro4ka [17]

Mutual savings banks are primarily regulated by the states in which they are located.

<span>To add, a </span>mutual savings bank<span> is a financial institution chartered by a central or regional government, without capital stock, that is owned by its members who subscribe to a common fund. From this fund claims, loans, etc., are paid. Profits after deductions are shared among the members.</span>

5 0

3 years ago