The debt-equity ratio is a common ratio used to assess a firm's ________.
A) liquidity
B) return on equity
C) leverage
D) retained earnings

Question

Quizplus · Accepted Answer

The debt-equity ratio measures the amount of debt a firm has relative to its equity. This indicates the level of leverage or financial risk the firm is carrying. A higher debt-equity ratio means that the company has a higher amount of debt and is therefore more leveraged, which can increase the risk for the company and its investors.

The Debt-Equity Ratio Is a Common Ratio Used to Assess