Which of the following does the debt ratio measure?
A)The proportion of the company's assets that are financed with equity
B)The company's ability to invest in growth
C)The company's overall ability to pay its liabilities
D)The company's ability to pay current liabilities with current assets

Question

Quizplus · Accepted Answer

The debt ratio measures the proportion of a company's assets that are financed with debt, which gives an indication of the company's overall ability to pay its liabilities. Option A is incorrect as it describes the equity ratio, Option B is incorrect as it describes the company's ability to invest in growth, and Option D is incorrect as it describes the current ratio.

Which of the Following Does the Debt Ratio Measure