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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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When analyzing a company’s debt to equity ratio, lithe ratio has a value that is greater than one, then the company has:

a. equal amounts of debt and equity. c. less debt than equity.

b. more debt than equity. d. none of these.

To determine

The debt equity ratio greater than 1 indicates what.

Explanation

Debt equity ratio is calculated by using the formula

Debt / Equity

The debt equity ratio greater than 1 indicates that there are more debts than equity...

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