Ratios that measure a ﬁrm's ﬁnancial leverage are known as _____ ratios.
A) Asset management.
B) Long-term solvency.
C) Short-term solvency.
D) Proﬁtability.
E) Market value

Question

Quizplus · Accepted Answer

The ratios that measure a firm's financial leverage are known as long-term solvency ratios. These ratios assess a firm's ability to meet its long-term obligations, including debt payments. Examples of long-term solvency ratios include debt-to-equity ratio, interest coverage ratio, and the times interest earned ratio.

Ratios That Measure a ﬁRm's ﬁNancial Leverage Are Known as _____