Which of the following ratios is least useful in evaluating a company's ability to pay its current debts as they become due?
A)Current ratio
B)Debt-to-equity ratio
C)Debt service coverage ratio
D)Acid-test ratio

Question

Quizplus · Accepted Answer

The debt-to-equity ratio measures the proportion of debt against equity in a company's capital structure and does not directly relate to the company's ability to pay its current debts as they become due. The other ratios (current ratio, debt service coverage ratio, and acid-test ratio) are all useful in evaluating a company's ability to pay its current debts as they become due.

Which of the Following Ratios Is Least Useful in Evaluating