Which of the following ratios would an engagement partner most likely calculate when reviewing the balance sheet in the overall review stage of an audit?
A) Quick assets divided by accounts payable.
B) Accounts receivable divided by inventory.
C) Interest payable divided by interest receivable.
D) Total debt divided by total assets.

Question

Quizplus · Accepted Answer

The ratio of total debt to total assets is a common financial ratio used to assess a company's leverage, liquidity, and solvency. The engagement partner would likely calculate this ratio as part of the overall review stage of an audit to evaluate the company's financial health and ability to meet its debt obligations.

Which of the Following Ratios Would an Engagement Partner Most