Which of the following is a solvency ratio?
A)Cash conversion cycle
B)Earnings per share
C)Debt ratio
D)Gross profit percentage

Question

Quizplus · Accepted Answer

A solvency ratio measures a company's ability to meet its long-term obligations. The debt ratio compares a company's total debt to its total assets and is used to determine the level of financial leverage a company has. The other options listed are not solvency ratios - cash conversion cycle is an efficiency ratio, earnings per share is a profitability ratio, and gross profit percentage is a margin ratio.

Which of the Following Is a Solvency Ratio