The ________ ratio measures the percentage of total assets financed by a small company's creditors compared to its owners.
A)debt
B)times-interest-earned
C)net sales to total assets
D)total asset turnover

Question

Quizplus · Accepted Answer

The debt ratio measures the proportion of a company's assets that are financed by debt, compared to the proportion that is financed by equity. It is calculated by dividing total liabilities by total assets. This ratio can provide insight into a company's financial risk, as a higher debt ratio means that the company has more debt relative to its assets, which increases the risk of default.

The ________ Ratio Measures the Percentage of Total Assets Financed