Which of the following ratios would be used to evaluate the long-term risk and capital structure of a company?
A)debt to equity ratio
B)quick ratio
C)profit margin
D)cash ratio

Question

Quizplus · Accepted Answer

The debt to equity ratio is a financial ratio that measures the amount of debt a company has compared to its shareholders' equity. It is a useful ratio when evaluating a company's long-term risk and capital structure because it provides insight into how much a company relies on debt financing versus equity financing. A high debt to equity ratio may indicate that a company is at higher risk of defaulting on its debt obligations, while a low ratio indicates a company has a lower risk of defaulting on its debt obligations.

Which of the Following Ratios Would Be Used to Evaluate