The pledged assets to secured liabilities ratio:
A) Can be calculated from the book value of assets and liabilities.
B) Can always be calculated from information provided in the financial statements.
C) Is not relevant to secured creditors.
D) Is a method of determining if the pledged assets of a debtor will provide adequate security for a creditor.
E) Is calculated by dividing book value of secured liabilities by book value of pledged assets.

Question

Quizplus · Accepted Answer

The pledged assets to secured liabilities ratio is used to assess whether the assets pledged by a debtor are sufficient to cover the secured liabilities, providing adequate security for the creditor.

The Pledged Assets to Secured Liabilities Ratio