The ________ ratio measures the percentage of the assets of a firm that are owned by the creditors.
A)debt-to-equity
B)debt-to-assets
C)times-interest-earned
D)equity-to-profit

Question

Quizplus · Accepted Answer

The debt-to-assets ratio measures the percentage of a firm's assets that are financed by debt, which is essentially the percentage owned by the creditors. The debt-to-equity ratio measures the relationship between a firm's debt and its equity, and doesn't directly show the percentage owned by creditors. The times-interest-earned ratio measures a company's ability to pay interest expenses on its debt, and the equity-to-profit ratio is not a commonly used financial ratio.

The ________ Ratio Measures the Percentage of the Assets of a Firm