Which of the following is a characteristic of debt ratio?
A) It indicates an organization's operational efficiency.
B) It indicates how well an organization is being managed.
C) It indicates how well an organization will be able to meet its short-term financial obligations.
D) It indicates an organization's ability to meet long-term obligations.
E) It evaluates how well an organization is managing its basic operations.

Question

Quizplus · Accepted Answer

Debt ratio indicates the proportion of a company's assets that are financed by debt, which helps evaluate the organization's ability to meet its long-term obligations.

Which of the Following Is a Characteristic of Debt Ratio