Answer to Question #28948 in Management for alicia

Question

Which of the following statements is CORRECT?
a. The ratio of long-term debt to total capital is more likely to experience seasonal
fluctuations than is either the DSO or the inventory turnover ratio.
b. If two firms have the same ROA, the firm with the most debt can be expected to have the
lower ROE.
c. An increase in the DSO, other things held constant, could be expected to increase the
total assets turnover ratio.
d. An increase in the DSO, other things held constant, could be expected to increase the
ROE.
e. An increase in a firm’s debt ratio, with no changes in its sales or operating costs, could be
expected to lower the profit margin.