The ratio calculated by dividing total liabilities by owners' equity is the _____.
A) current ratio
B) debt-to-assets ratio
C) acid-test ratio
D) debt-to-owners' equity ratio
E) return on equity

Question

Quizplus · Accepted Answer

The ratio calculated by dividing total liabilities by owners' equity is the debt-to-owners' equity ratio. This ratio indicates the extent to which owners' equity can settle the liabilities of a company.

The Ratio Calculated by Dividing Total Liabilities by Owners' Equity