The debt to owners' equity ratio is a common type of_______ratio.
A)liquidity
B)performance
C)leverage
D)liability

Question

Quizplus · Accepted Answer

The debt to owners' equity ratio is a measure of a company's leverage, or the extent to which it is relying on borrowed funds. It compares the amount of debt a company has taken on with the amount of equity invested by its owners. A high debt to owners' equity ratio indicates that the company has a high level of debt relative to its equity, which may be a cause for concern for investors and lenders. Therefore, it is a measure of a company's solvency and financial risk.

The Debt to Owners' Equity Ratio Is a Common Type