Which of the following statements about the capital acquisitions ratio is true?

A. A high ratio indicates less need for outside financing of property, plant and equipment.
B. The ratio is computed by dividing cash flow from operations by the average property, plant and equipment, net from the balance sheet.
C. A low ratio may indicate a failure to update property, plant and equipment which can limit a company's ability to compete in the future.
D. Both A and C are true.
E. All the above are true.

Ans: A. A high ratio indicates less need for outside financing of property, plant and equipment.