The ________ ratio provides information on the portion of a business owned by the lenders and the portion owned by the founders.
A)debt-to-equity
B)debt-to-assets
C)times-interest-earned
D)equity-to-profit

Question

Quizplus · Accepted Answer

The debt-to-equity ratio compares the total liabilities (debt) of a business to its total shareholders' equity, providing information on the portion owned by lenders (creditors) and the portion owned by the founders (shareholders). Option B, debt-to-assets ratio compares liabilities to total assets, option C, times-interest-earned ratio measures a company's ability to repay interest expenses on outstanding debt, and option D, equity-to-profit ratio is not a commonly used ratio for assessing ownership structure.

The ________ Ratio Provides Information on the Portion of a Business