. Excess inventory level will increase the current ratio and the liquidity of the company. *

True

False

. In risk-free environment, lower debt ratios always indicate good debt management. *

True

False

. It might be possible to improve the ROE by using more debt, which in turn will lead to an increase in the P/E ratio and thus in the firms stock price. *

True

False

1. The higher the Equity multiplier is, the lower the equity is relative to total assets, and the higher the debt ratio will be. *

True

False

If the liquidity, asset management, debt management, and profitability ratios all look bad and if investors think these ratios will continue to look bad in the future, the market value ratios will be high, the stock price will be as low as can be expected, and management will be judged to have been doing a bad job. *

True

False