Which ratio measures the extent to which a firm relies on debt to meet its financing needs?
A) asset management ratio
B) leverage ratio
C) profitability ratio
D) liquidity ratio

Question

Quizplus · Accepted Answer

The leverage ratio measures the extent to which a firm relies on debt to meet its financing needs. It specifically looks at the proportion of a firm's assets that are financed through debt rather than equity. This ratio can be useful in assessing a company's financial risk, as high levels of debt can increase the chances of default or bankruptcy.

Which Ratio Measures the Extent to Which a Firm Relies