Which of the following measures would assist in assessing the solvency of a company?
A)Debt-to-assets ratio
B)Fixed asset turnover ratio
C)Return on equity ratio
D)Quality of income ratio

Question

Quizplus · Accepted Answer

The debt-to-assets ratio measures the percentage of a company's assets that are financed with debt. A lower ratio indicates a higher level of solvency, as the company is less reliant on debt financing to support its operations. Consequently, a high ratio indicates that a company may have difficulty meeting its obligations if it experiences financial difficulties.

Which of the Following Measures Would Assist in Assessing the Solvency