Assume that you are considering purchasing some of a company's long-term bonds as an investment.Which of the company's financial statement ratios would you probably be most interested in?
A)Debt to assets ratio
B)Debt to equity
C)Plant assets to long-term liabilities
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

The debt to assets ratio measures the percentage of a company's assets that are financed by debt.The debt to equity ratio compares creditor financing to owner financing.Financial statement users may analyze a firm's ability to obtain long-term financing on the strength of its asset base.Short-term assets should be financed with short-term liabilities;the current ratio,introduced earlier,indicates how well a company manages current debt.Long-lived assets should be financed with long-term liabilities,and the plant assets to long-term liabilities ratio shows the amount of assets per each dollar of long term debt.

Assume That You Are Considering Purchasing Some of a Company's