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

Question

Quizplus · Accepted Answer

The debt ratio compares a company's total debt to its total assets and expresses it as a percentage. It indicates the proportion of a company's assets that are financed through debt. Therefore, choice D is the correct answer. Choice A refers to the current ratio, choice B refers to the debt service coverage ratio, and choice C refers to the interest coverage ratio.

The Debt Ratio Is an Indicator of a Company's