Which of the following ratios would show you the level of debt compared to assets or equity?
A) liquidity ratio
B) leverage ratio
C) activity ratio
D) quick ratio

Question

Quizplus · Accepted Answer

The leverage ratio is used to show the level of debt compared to assets or equity. It helps to determine the degree to which a company has borrowed to finance its operations and whether it is using its resources efficiently. Therefore, option B is the best choice. The liquidity ratio measures a company's ability to meet its short-term financial obligations, the activity ratio shows how efficiently a company is using its assets, and the quick ratio is another measure of liquidity that is more conservative than the current ratio.

Which of the Following Ratios Would Show You the Level