Net assets to total assets ratio reflects an organization's ability to repay a loan.

Name: Net assets to total assets ratio reflects an organization's ability to repay a loan.
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Question

Quizplus · Accepted Answer

The net assets to total assets ratio does not directly reflect an organization's ability to repay a loan; it indicates the proportion of a company's assets that are financed by its own funds rather than by debts. The ability to repay a loan is more directly assessed by liquidity ratios or debt service coverage ratios.

Net Assets to Total Assets Ratio Reflects an Organization's Ability