Asked by Christian Mirakaj on Jul 04, 2024
Verified
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.
Verified Answer
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.
Learning Objectives
- Assess the capability of a company to fulfill its short-term and long-term financial commitments.
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