If a stakeholder wanted to measure the risk of a company, which of the following would they calculate?
A)Liquidity
B)Operating cycle
C)Profitability
D)Debt-to-equity ratio

Question

Quizplus · Accepted Answer

The debt-to-equity ratio measures the amount of debt a company has in comparison to its equity, which indicates the risk level of the company. Higher debt-to-equity ratios suggest greater risk as the company may have more difficulty covering its debt obligations in the long term.

If a Stakeholder Wanted to Measure the Risk of a Company