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Unformatted text preview: in liquidity, long term liabilities because they want a stable company that they feel will be around long enough to give them a return on their investments. Stockholders would look for companies that might frequently pay dividends or companies that put money back into their company providing growth which would in turn rise the price of their stock. 10. A: If a company has an increase of earnings per-share, this is generally a good thing and means that there were more shares sold and the net income was high. B: An increase in the current ratio is also good thing for the company. An increase suggests that the company has more current assets than liabilities or less liability than previous years. C: An increase in the ratio of debt to total assets is bad for the company, because the higher the ratio the lower the equity. This would mean that the creditors would have to provide a large amount of money to cover costs. In turn, that the company has a higher risk of solvency....
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This note was uploaded on 04/29/2008 for the course AC 11 taught by Professor Kravet during the Fall '07 term at Fairfield.
- Fall '07
- Financial Accounting