The percentage of assets financed by long-term debt is best described by the
A)debt to equity ratio.
B)interest coverage ratio.
C)long-term debt to asset ratio.
D)long-term debt to tangible assets ratio.

Question

Quizplus · Accepted Answer

The long-term debt to asset ratio is specifically designed to measure the percentage of assets that are financed by long-term debt. The ratio is calculated by dividing the total long-term debt by the total assets of the company. A higher long-term debt to asset ratio indicates that a larger percentage of assets is being financed by long-term debt, which has implications for the company's overall leverage and financial stability. The other ratios listed do not specifically measure the percentage of assets financed by long-term debt.

The Percentage of Assets Financed by Long-Term Debt Is Best