Which of the following ratios is a solvency ratio?
A)Net profit margin ratio
B)Current ratio
C)Fixed asset turnover ratio
D)Debt-to-assets ratio

Question

Quizplus · Accepted Answer

Solvency ratios measure the company's ability to survive long enough to repay lenders when debt matures and to make the required interest payments prior to the date of maturity.The debt-to-assets ratio is a solvency ratio.Net profit margin and asset turnover are profitability ratios.The current ratio is a liquidity ratio.

Which of the Following Ratios Is a Solvency Ratio