Question
This company has a financial covenant to maintain debt to capital ratio (D/k) of no more than 50%. The financial covenant would be in any
This company has a financial covenant to maintain debt to capital ratio (D/k) of no more than 50%. The financial covenant would be in any company's loan, note of bond agreement.
Select the best answer.
A.
The ratio is 50% and the company is not in compliance
B.
The ratio is 2.0 and the company is not in compliance
C.
The ratio is 33% and the company is in compliance
D.
None of the answers presented is correct
E.
The ratio is 33% and the company is not in compliance
F.
This company does not have any borrowed money so it does not have a borrowing agreement
G.
The ratio is 50% and the company is in compliance
Simple Balance Sheet Assets Cash Accounts Receivable Total Assets Liabilities & Owner's Equity Liabilities Bank Loan Accounts Payable Total Liabilities Owner's Equity Acme Photo, Capital Total Owner's Equity 1000.00 500.00 $1500.00 250.00 750.00 $1000.00 500.00 $500.00 Total Liabilities & Owner's Equity $1500.00
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