Which of the following measures the ability for a company to meet long-term obligations or take on more debt?
A)Return on equity
B)Debt ratio
C)Current ratio
D)Debt turnover

Question

Quizplus · Accepted Answer

The debt ratio measures a company's ability to pay off its long-term obligations by comparing its total liabilities to its total assets. A lower debt ratio indicates a healthier financial position, suggesting the company is more capable of meeting long-term obligations or taking on more debt if necessary.

Which of the Following Measures the Ability for a Company