Regarding ratio analysis as predictor of bankruptcy

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Which one of these statements is correct regarding ratio analysis as a predictor of bankruptcy?

Firms with a total debt to total assets ratio of 75% or less tend to survive rather than fail.

Failing firms have a lower EBITDA to total liabilities ratio than surviving firms.

As early as four years before they went bankrupt, failing firms were earning a higher return on assets than firms that survived.

On average, failing firms have a lower ratio of liabilities to assets than surviving firms.

Reference no: EM131176368

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