Which of these ratios measure the extent to which the firm uses debt (or financial leverage) versus equity to finance its assets?
A)Debt management ratios
B)Equity ratios
C)Financial ratios
D)Liquidity ratios

Question

Quizplus · Accepted Answer

Debt management ratios, also known as leverage ratios, measure the extent to which a firm uses debt financing. These ratios include debt-to-equity ratio, debt-to-assets ratio, and interest coverage ratio. Therefore, this is the best answer as it directly refers to the use of debt versus equity.

Which of These Ratios Measure the Extent to Which the Firm