Which financial statement would indicate whether the company relies more on debt or on shareholders' equity to finance its assets?
A)Statement of cash flows
B)Statement of changes in equity
C)Income statement
D)Statement of financial position

Question

Quizplus · Accepted Answer

The statement of financial position (also known as the balance sheet) shows the company's assets and how they are financed, either through liabilities (debt) or shareholders' equity. The liabilities and equity sections of the statement indicate the amounts owed to creditors and investors, respectively, and thus provide insight into the company's reliance on debt versus equity financing.

Which Financial Statement Would Indicate Whether the Company Relies More