_____ is a solvency metric and is computed as total assets minus total liabilities.
A) Ratio of fixed assets to long-term liabilities
B) Debt ratio
C) Asset turnover
D) Net asset

Question

Quizplus · Accepted Answer

The solvency metric that is computed as total assets minus total liabilities is referred to as net assets. Choice A is incorrect because the ratio of fixed assets to long-term liabilities is a measure of a company's ability to meet its long-term debt obligations. Choice B is incorrect because debt ratio is a measure of a company's proportion of debt to total assets. Choice C is incorrect because asset turnover is a measure of a company's efficiency in utilizing its assets to generate revenue.

_____ Is a Solvency Metric and Is Computed as Total