You are considering an investment in General Motors stock and wish to assess the firm's long-term debt-paying ability and its use of debt financing.All of the following ratios can be used to assess solvency except:
A)Number of times interest is earned.
B)Net margin.
C)Debt to equity ratio.
D)Debt to assets ratio.

Question

Quizplus · Accepted Answer

Net margin is a profitability ratio and does not directly assess a firm's long-term debt-paying ability or its use of debt financing. The other three ratios (number of times interest is earned, debt to equity ratio, and debt to assets ratio) all relate to a firm's solvency and its ability to meet its debt obligations.

You Are Considering an Investment in General Motors Stock and Wish