Which of the following is an accurate statement regarding a company's ability to meet its long-term debt obligations?
A) If the debt-to-equity ratio is too high, it may indicate that the company has used up its borrowing capacity.
B) If the debt-to-equity ratio is too high, it may mean that available leverage is not being used to the owners' benefit.
C) The times interest earned ratio indicates if a company can make its principal and interest payments.
D) The key ratios that are used to measure a long-term solvency are debt to equity, return on assets, and times interest earned.

Question

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The Answer of Which of the following is an accurate statement regarding a company's ability to meet its long-term debt obligations?
A) If the debt-to-equity ratio is too high, it may indicate that the company has used up its borrowing capacity.
B) If the debt-to-equity ratio is too high, it may mean that available leverage is not being used to the owners' benefit.
C) The times interest earned ratio indicates if a company can make its principal and interest payments.
D) The key ratios that are used to measure a long-term solvency are debt to equity, return on assets, and times interest earned.

Which of the Following Is an Accurate Statement Regarding a Company's