Which one of the following ratios examines the organization's use of debt to finance its assets and its ability to meet the interest payments on the debt?
A) liquidity ratios
B) leverage ratios
C) profitability
D) activity ratios

Question

Quizplus · Accepted Answer

Leverage ratios examine the organization's use of debt to finance its assets and its ability to meet the interest payments on the debt. Liquidity ratios assess the company's ability to meet short-term obligations, profitability ratios measure the company's ability to generate profits, and activity ratios measure how efficiently the company utilizes its assets.

Which One of the Following Ratios Examines the Organization's Use