A common measure of long-term solvency is the
A)receivable turnover.
B)asset turnover.
C)debt to equity ratio.
D)current ratio.

Question

Quizplus · Accepted Answer

The debt to equity ratio measures the amount of debt a company has in relation to its equity. A higher ratio indicates that the company is more heavily reliant on debt financing, which can be risky in the long-term. Therefore, a low debt to equity ratio is a common measure of long-term solvency.

A Common Measure of Long-Term Solvency Is the