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Which of the following statements regarding the ratio of liabilities to stockholders' equity is not true? A ratio of 1 indicates that liabilities equal stockholders'
Which of the following statements regarding the ratio of liabilities to stockholders' equity is not true?
A ratio of indicates that liabilities equal stockholders' equity.
Sole proprietorships can use this ratio but substitute total owner's equity for total stockholders' equity.
The higher this ratio, the better able a business is to withstand poor business conditions and pay creditors.
The lower this ratio, the better able a business is to withstand poor business conditions and pay creditors.
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