The debt-to-equity ratio is used to determine whether or not a ________.
A)company's stock is a good investment
B)company can earn a satisfactory rate of return
C)company can pay its bills on time
D)company can survive over a long period of time

Question

Quizplus · Accepted Answer

The debt-to-equity ratio measures the amount of debt a company has compared to its shareholders' equity. A high debt-to-equity ratio can indicate that a company is borrowing too much and may be at risk of not being able to repay its debts over time. Therefore, the debt-to-equity ratio is used to determine whether or not a company can survive over a long period of time.

The Debt-To-Equity Ratio Is Used to Determine Whether or Not