Question : If debt equity ratio exceeds______, it indicates risky financial position.

Option 1: 1:1

Option 2: 2:1

Option 3: 1:2

Option 4: 3:1

Question : If the debt-equity ratio is 0.43: 1. What will the ratio indicate with respect to the company's financial position?

Option 1: It indicates that the long-term financial position of the company is very sound

Option 2: It indicates that the long-term financial position of the company is weak

Option 3: It indicates that the short term financial position of the company is very sound

Option 4: It indicates that the short-term financial position of the company is very weak

Question : If the debt-equity ratio is 0.43: 1. What will the ratio indicate with respect to the company's financial position?

Option 1: It indicates that the long-term financial position of the company is very sound

Option 2: It indicates that the long-term financial position of the company is weak

Option 3: It indicates that the short term financial position of the company is very sound

Option 4: It indicates that the short-term financial position of the company is very weak

Question : Which of the following statements is incorrect?

Option 1: Debt equity ratio is calculated to assess the ability of the firm to meet its long-term liabilities.

Option 2: If the debt-equity ratio is more than that, it shows a rather risky financial position from the long-term point of view.

Option 3: debt-equity ratio of 1: 1 is considered safe.

Option 4: A high debt-equity ratio is a danger signal for long-term lenders.

Question : Which of the following statements is incorrect?

Option 1: Debt equity ratio is calculated to assess the ability of the firm to meet its long-term liabilities.

Option 2: If the debt-equity ratio is more than that, it shows a rather risky financial position from the long-term point of view.

Option 3: debt-equity ratio of 1: 1 is considered safe.

Option 4: A high debt-equity ratio is a danger signal for long-term lenders.

Question : What does a high debt-to-equity ratio suggest about a risky financial situation?

Option 1: 3: 1

Option 2: 1: 2

Option 3: 1: 1

Option 4: 2: 1