Which one of the following would be considered a long-term solvency ratio?
A) Accounts receivable turnover
B) Return on assets
C) Current ratio
D) Debt to assets ratio

Question

Quizplus · Accepted Answer

Long-term solvency ratios focus on a company's ability to meet its long-term debt obligations. The debt to assets ratio is a long-term solvency ratio that measures the proportion of a company's assets that are financed with debt, providing an indication of the company's ability to repay its long-term debt. Accounts receivable turnover and return on assets are profitability ratios, while the current ratio measures a company's short-term liquidity.

Which One of the Following Would Be Considered a Long-Term