One of several ratios that reflects solvency includes the:
A) Acid-test ratio.
B) Current ratio.
C) Times interest earned ratio.
D) Total asset turnover.
E) Days' sales in inventory.

Question

Quizplus · Accepted Answer

The times interest earned ratio measures a company's ability to meet its interest payments using its operating income. This reflects the company's ability to handle its debts and indicates its solvency.

One of Several Ratios That Reflects Solvency Includes The