Which of the following ratios is computed by dividing the average total assets by the average owners' equity?
A)equity multiplier
B)debt-to-equity ratio
C)current liabilities-to-total-debt ratio
D)current ratio

Question

Quizplus · Accepted Answer

The equity multiplier is computed by dividing total assets by owners' equity, whereas the debt-to-equity ratio and current liabilities-to-total-debt ratio involve dividing various amounts of debt by owners' equity. The current ratio compares current assets to current liabilities and does not involve owners' equity at all.

Which of the Following Ratios Is Computed by Dividing the Average