Which of the following groups of ratios measure a company's ability to pay its long-term debt?
A)Current ratio and debt ratio
B)Debt ratio, times-interest-earned ratio and rate of return on total assets
C)Current ratio and acid-test ratio
D)Debt ratio and times-interest earned ratio

Question

Quizplus · Accepted Answer

The debt ratio measures the proportion of a company's assets that are financed by debt, while the times-interest-earned ratio measures the company's ability to make interest payments on its debt. Both of these ratios focus specifically on a company's long-term debt obligations.

Which of the Following Groups of Ratios Measure a Company's