Which of the following measures would assist in assessing the solvency of a company?
A)Debt-to-assets and times interest earned
B)Fixed asset turnover and EPS
C)Return on equity and debt-to-assets
D)Current ratio and times interest earned

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.Debt-to-assets and times interest earned are a solvency ratios.Fixed asset turnover and return on equity are profitability ratios.The current ratio is a liquidity ratio.

Which of the Following Measures Would Assist in Assessing the Solvency