The long-term debt ratio
A)measures the significance of long-term debt as a source of asset financing.
B)measures the effect of management's use of long-term debt.
C)compares profits to the company's total debt.
D)is a measure of profitability.

Question

Quizplus · Accepted Answer

The long-term debt ratio measures the significance of long-term debt as a source of asset financing, specifically by comparing long-term debt to total assets. It does not measure management's use of debt, profitability, or compare profits to total debt.

The Long-Term Debt Ratio