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 : 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 : The Debt-Equity Ratio of a Company is 1: 2. Payment of Dividend Payable would

Option 1: Increase debt to equity ratio

Option 2: Decrease debt to equity ratio

Option 3: No change

Option 4: Increase current ratio

Question : The Debt-Equity Ratio of a Company is 1: 2. Goods purchased on Credit would

Option 1: Increase debt to equity ratio

Option 2: Decrease debt to equity ratio

Option 3: No change

Option 4: Increase current ratio