The management of Uruk Co feels that the company is over-capitalizedand have cited the following statements to support t
Posted: Mon Mar 07, 2022 8:42 am
The management of Uruk Co feels that the company is over-capitalizedand have cited the following statements to support their view:
1. Over-capitalizationis indicated by lower-than-average sales revenue to working capital ratio.
2. Over-capitalizationis indicated by higher-than-average debt to equity ratio.
Which of the following combinations (true/false) concerning the above statements is correct?
A. Statement 1 = True, Statement 2 = True
B. Statement 1 = True, Statement 2 = False
C. Statement 1 = False, Statement 2 = True
D. Statement 1 = False, Statement 2 = False
1. Over-capitalizationis indicated by lower-than-average sales revenue to working capital ratio.
2. Over-capitalizationis indicated by higher-than-average debt to equity ratio.
Which of the following combinations (true/false) concerning the above statements is correct?
A. Statement 1 = True, Statement 2 = True
B. Statement 1 = True, Statement 2 = False
C. Statement 1 = False, Statement 2 = True
D. Statement 1 = False, Statement 2 = False