The debt to assets ratio
A) is a solvency ratio.
B) is computed by dividing total assets by total debt.
C) measures the total assets provided by stockholders.
D) is a profitability ratio.

Question

Quizplus · Accepted Answer

The debt to assets ratio is a solvency ratio as it measures the ability of a company to pay its debts in the long term. It is calculated by dividing total debt by total assets, and it shows the proportion of a company's assets that are financed by debt.

The Debt to Assets Ratio