Which of the following types of financial ratios indicates the degree to which the organization uses debt or equity to finance its ongoing operations?
A) Leverage ratios
B) Liquidity ratios
C) Activity ratios
D) Profit ratios
E) Inventory turnover ratios

Question

Quizplus · Accepted Answer

Leverage ratios, such as the debt-to-assets ratio and the times-covered ratio, measure the degree to which managers use debt (borrow money) or equity (issue new shares) to finance ongoing operations.

Which of the Following Types of Financial Ratios Indicates the Degree