An analyst can judge a company's level of debt by comparing these ratios:
A)return-on-equity to total debt-to-assets
B)return-on-equity to total asset turnover
C)return-on-equity to debt turnover
D)return-on-equity to return-on-assets
E)return-on-equity to current ratio

Question

Quizplus · Accepted Answer

Comparing the return-on-assets to the return-on-equity gives the analyst clues as to how much leverage a company is using, and whether they are possibly buying back shares of stock.

An Analyst Can Judge a Company's Level of Debt by Comparing