Which ratios measure the degree of risk associated with borrowing money from outsiders to finance the business?
A)liquidity ratios.
B)investment ratios.
C)gearing ratios.
D)efficiency ratios.

Question

Quizplus · Accepted Answer

Gearing ratios measure the degree of risk associated with borrowing money from outsiders to finance the business, as they measure the proportion of debt financing compared to equity financing. Common gearing ratios include debt-to-equity ratio and debt-to-assets ratio.

Which Ratios Measure the Degree of Risk Associated with Borrowing