Carlson Co. has a debt-to-equity ratio of 2.80, compared to the industry average of 3.36. Its competitor

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Carlson Co. has a debt-to-equity ratio of 2.80, compared to the industry average of 3.36. Its competitor Tucci Co., however, has a debt-to-equity ratio of 2.24. Based on what debt-to-equity ratios imply, which of the following statements is true?

Carlson Co. has higher creditworthiness as compared to Tucci Co.

Carlson Co. has greater financial risk as compared to Tucci Co. but lower than the average financial risk in the industry.

Tucci Co.'s creditors face higher risk than the average financial risk in the industry.

Tucci Co. has a greater risk of bankruptcy than Carlson Co

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Financial Statement Analysis

ISBN: 978-0078110962

11th edition

Authors: K. R. Subramanyam, John Wild

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Posted Date: Dec 21, 2023 02:16 AM

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Carlson Co. has a debt-to-equity ratio of 2.80, compared to the industry average of 3.36. Its competitor

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Financial Statement Analysis

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