American_Bankers_Association
CTFA · Question #309
Palo Alto Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This means that the company:
The correct answer is D. Has greater than average financial risk when compared to other firms in its industry. See the full explanation below for the reasoning.
Question
Palo Alto Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This means that the company:
Options
- AWill not experience any difficulty with its creditors
- BHas less liquidity than other firms in the industry
- CWill be viewed as having high creditworthiness
- DHas greater than average financial risk when compared to other firms in its industry
How the community answered
(45 responses)- A2% (1)
- B13% (6)
- C4% (2)
- D80% (36)
Community Discussion
No community discussion yet for this question.