If Company A uses more debt than Company B and both companies have identical operations in terms
Question:
If Company A uses more debt than Company B and both companies have identical operations in terms of sales, operating costs, etc., which of the following statements is true?
(a) Company B will definitely have a higher current ratio.
(b) Company B has a higher profit margin on sales than Company A.
(c) The two companies have the identical profit margin on sales.
(d) Company B’s return on total assets would be higher.
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