Question

For which of the following would a higher ratio always be preferred?

	Equity multiplier
	Debt to capital ratio
	Days sales outstanding
	Net margin

Answer 1

Net margin is ratio which is always preferred higher.

higher equity multiplier is not always preferred as higher ratio indicates low portion of assets is financed thorugh equity and more with debt which is not a good condition.

Higher debt to capital ratio is also not preferred as higher debt refers more cost of debt and also chances of bankruptcy

Higher day salez outstanding is not preferred as it will means that at any time huge amount of money is blocked in reccievables.