Which of the following ratios is used to evaluate solvency?
A)Earnings per share (EPS)
B)Fixed asset turnover
C)Debt-to-assets
D)Current ratio

Question

Quizplus · Accepted Answer

Solvency ratios measure the company's ability to survive long enough to repay lenders when debt matures and to make the required interest payments prior to the date of maturity.Debt-to-assets is a solvency ratio.EPS and fixed asset turnover are profitability ratios.The current ratio is a liquidity ratio.

Which of the Following Ratios Is Used to Evaluate Solvency