Answered step by step
Verified Expert Solution
Question
1 Approved Answer
As Dan's business has a current ratio of 2.08, the phrase current ratio can be used. Hence, a current ratio is quite high. The business
As Dan's business has a current ratio of 2.08, the phrase "current ratio" can be used. Hence, a current ratio is quite high. The business of Dan is performing adequately, and when the benchmark rises, the business of Dan is capable of The higher the ratio, the more likely it is that they will be able to repay their obligations. The debt to equity ratio for Dan's company is 0.19, which indicates that it is a low risk firm. A corporation with a debt to equity ratio of up to 2 is considered to be a low risk enterprise. And Dan's company, which has liabilities totaling $0.19 for every dollar of assets it possesses, brings the total to $1. This has an extremely little chance of happening. b Profit Margin: A good margin ratio will vary considerably from industry to industry, but as a general rule of thumb, a margin of 20% is considered high (or "good"), and a margin of 5% is considered low. A business is considered to be within the benchmark if it has a profit margin ratio of 15%, which indicates that the business is profitable
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started