Ratios that measure a firm's financial leverage are known as ________ ratios.
A)asset management
B)long-term solvency
C)short-term solvency
D)profitability
E)market value

Question

Quizplus · Accepted Answer

Long-term solvency ratios, such as debt-to-equity and total debt ratios, measure a firm's financial leverage and its ability to meet its long-term obligations. Asset management ratios assess a firm's efficiency in managing its assets, short-term solvency ratios evaluate a firm's ability to meet its short-term obligations, profitability ratios analyze a firm's ability to generate profits, and market value ratios measure the market perception of a firm's performance.

Ratios That Measure a Firm's Financial Leverage Are Known as ________