Which of the following will not permit a higher internal growth rate, other things equal?

Question

a: higher plowback ratio
b: higher debt-to-asset ratio
c: higher return on equity
d: higher return on assets

Answer 1

Internal Growth Rate is the highest level of growth achievable for a business without obtaining outside financing. It is derived by taking a company's retained earnings and dividing by total assets. It is good to have a high internal growth rate.

Answer : (b)

Debt-to-asset ratio is calculated by liabilities / assets
Also known as Debt Asset Ratio, it measures the extent to which the acquisition of assets has been financed by creditors. A ratio under 1 means a majority of assets are financed through equity, above 1 means they are financed more by debt. Furthermore you can interpret a high ratio as a "highly debt leveraged firm". A high debt-to-asset ratio will lead to a low internal growth rate.

On a separate note, you posted another question :
Business transactions are first recorded in the? to which you chose the General Ledger as the answer. With the greatest respect, I'm very sure it's not the right answer. Transactions are first recorded in the General Journal. It's only after that that the entries are posted into the Ledger. I couldn't let you fail your homework without commenting.

Answer 2

First, I’m not entirely convinced by the 50% divorce stat a lot of people throw around. It seems that the divorce rate among certain groups – people who married in their teens, for example, or who had low educational attainment – is much higher than it is for older people who are better trained and more established. Second, I think divorce is a tragedy – and more so multiple divorces. There are some situations where it is necessary, but most of the time, things could be worked out. The former spouses are still connected by finances and children, if not by strong feelings that linger. They’re never quite quit of each other, at any rate, and so the separation is rarely really completed. I kind of do blame society for this. The idea of serial monogamy has been positioned as an alternative to marriage or long-term domestic partnership, when in reality, the “boyfriend/girlfriend” game is inferior. (That’s right; I said it.)