Question
A subsidiarys accounts are measured in euros. Assume the leverage ratio is ending total liabilities divided by ending total assets. The current ratio is ending
A subsidiarys accounts are measured in euros. Assume the leverage ratio is ending total liabilities divided by ending total assets. The current ratio is ending current assets divided by ending current liabilities. The subsidiarys accounts must be converted to U.S. dollars for consolidation. If the U.S. dollar has been steadily strengthening against the euro, which statement is true concerning the subsidiarys financial ratios?
a.) Leverage in euros equals leverage remeasured from euros to dollars.
b.) Current ratio in euros equals current ratio translated from euros to dollars.
c.) Current ratio translated from euros to dollars is higher than current ratio remeasured from euros to dollars.
d.) Leverage remeasured from euros to dollars is higher than leverage translated from euros to dollars.
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