1. When analyzing a company’s debt-to-equity ratio, if the ratio has a value that is greater than 1, then the company has:
Less debt than equity
More debt than equity
Equal amounts of debt and equity
None of these are correct
2. Schuester Company has $40,000 in current liabilities, $20,000 in cash, and $25,000 in short-term investments. What is Schuester’s cash ratio?
1.125
0.889
1.6
0.625