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What do these empirical results suggest about liabilities

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Problem - Interpreting Operating Cash Flow to Current and Total Liabilities Ratios - Empirical research cited in the text indicates that firms with an operating cash flow to current liabilities ratio exceeding 0.40 portray low short-term liquidity risk. Similarly, firms with an operating cash flow to total liabilities ratio exceeding 20% portray low long-term solvency risk. What do these empirical results suggest about the mix of current and noncurrent liabilities for a financially healthy firm? What do they suggest about the mix of liabilities versus shareholders' equity financing?

Reference no: EM132894185

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