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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
20. Partial financial data for a company: Current ratio = 1.28 to 1 Debt-to-equity ratio = 2.9 Times interest earned = 0.8 Industry average data: Current ratio = 2.1 to 1 Debt-to-equity ratio = 2.9 Viewing this data from the perspective of a mortgage lender, which statement would be true? A. This company would be a better credit risk than the industry average. B. The current ratio shows that this company has more working capital available to make its loan payments than the industry average. C. This company would not be a better credit risk than the industry average. D. The debt-to-equity ratio shows that this company holds less debt relative to its equity than the industry average.
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