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    • Question

      A startup capitalizes ₹5 crore R&D as intangible asset

      instead of expensing. This increases asset base and reduces current expense. Which ratio is improved?
      A Return on assets Correct Answer Incorrect Answer
      B EBITDA margin Correct Answer Incorrect Answer
      C Debt-to-equity Correct Answer Incorrect Answer
      D All of the above Correct Answer Incorrect Answer
      E None Correct Answer Incorrect Answer

      Solution

      Capitalizing reduces expense (improving profitability), increases assets (reducing leverage ratios), so all ratios improve superficially.

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