All of the following are true regarding financial statement analysis ratios asso

Question

All of the following are true regarding financial statement analysis ratios associated with liabilities except if a company's current ratio is lower than the industry average, then it may lack liquidity. a high times interest earned ratio indicates that a company is more likely to meet interest payments as scheduled. unrecorded obligations causing sizeable differences between liquidity and solvency ratios can be ignored. high liquidity ratios mean that lines of credit should be high to compensate.

Explanation / Answer

correct option is "D" - High liquidity ratios means that lines of credit should be high to compensate .

It is not necessary that company with high liquidity have Higher line of credit .The statement is false.

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