The ratio that measures total liabilities as a percentage of total assets is called the:
A)Current ratio.
B)Working capital.
C)Debt ratio.
D)Quick ratio.

Question

Quizplus · Accepted Answer

The debt ratio measures a company's total liabilities as a percentage of its total assets, providing insight into the company's ability to manage its debt. The current ratio measures a company's ability to pay its short-term obligations with its current assets, working capital measures a company's liquidity by subtracting current liabilities from current assets, and the quick ratio measures a company's ability to pay its short-term obligations with its liquid assets. None of these ratios specifically focus on total liabilities as a percentage of total assets.

The Ratio That Measures Total Liabilities as a Percentage of Total