Question : The long-term solvency ratio is indicated by
Option 1: current ratio
Option 2: quick ratio
Option 3: net profit ratio
Option 4: debt-equity ratio
Correct Answer: debt-equity ratio
Solution : Answer = debt-equity ratio
The debt-equity ratio, a long-term solvency ratio, measures a company's financial leverage by comparing its long-term debt to its equity. It indicates the proportion of financing provided by creditors relative to shareholders, assessing the company's ability to meet long-term obligations. Hence, the correct option is 4.
Question : Which of the following shows the Long term solvency?
Question : ________ratio is a variation of the debt-equity ratio and gives the same indication as the debt-equity ratio. In this ratio, total assets are expressed in relation to long-term debts.
Question : Which of the following tells long-term solvency?
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