Solvency ratios measure ________.
A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question

Quizplus · Accepted Answer

Solvency ratios measure a firm's ability to pay their debts and stay in business. Examples of solvency ratios include debt-to-equity ratio, interest coverage ratio, and debt service coverage ratio. These ratios help assess the long-term financial health and stability of a company.

Solvency Ratios Measure ________