The debt ratio is an indicator of a company's:
A)percentage of assets financed with debt.
B)relationship between current liabilities and current assets.
C)relationship between interest expense and income.
D)relationship between debt and interest expense.

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing a company's total liabilities by its total assets. This ratio indicates what percentage of a company's assets are financed with debt. It is a measure of a company's leverage and can indicate its ability to pay off its debts.

The Debt Ratio Is an Indicator of a Company's