Asked by Christian Mirakaj on Jul 04, 2024

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The ratio of fixed assets to long-term liabilities provides a measure of a firm's ability to pay dividends.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted into cash within one year, such as buildings, machinery, and equipment.

Long-Term Liabilities

Liabilities that will not be due for a long time (usually more than one year).

  • Assess the capability of a company to fulfill its short-term and long-term financial commitments.
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ZS
Zainab SaeedJul 09, 2024
Final Answer :
False
Explanation :
The ratio of fixed assets to long-term liabilities is a measure of a firm's solvency or its ability to cover its long-term debts. It does not provide any information about a firm's ability to pay dividends.