Which of the following ratios are used to evaluate long-term financial stability?
I. Debt ratio
II. Current ratio
III. Equity ratio
IV. Profit margin
V. Quick ratio

Question

Quizplus · Accepted Answer

Debt ratio and Equity ratio are both measures of a company's long-term financial stability, as they indicate the level of debt and equity financing being used to fund operations and investments. Current ratio and Quick ratio are measures of short-term liquidity, while Profit margin is a measure of profitability. Therefore, only options A is correct.

Which of the Following Ratios Are Used to Evaluate Long-Term