Which of the following ratios indicates a firm's financial flexibility (the ability to issue stock or borrow fund)?
A)debt to equity ratio
B)return on equity ratio
C)current ratio
D)return on assets

Question

Quizplus · Accepted Answer

The debt to equity ratio measures the amount of debt a company has compared to its equity. A low debt to equity ratio indicates that the company has more equity than debt, which means that it has more financial flexibility to issue stock or borrow funds if needed.

Which of the Following Ratios Indicates a Firm's Financial Flexibility