Solvency ratios are used to determine whether or not a ________.
A)company's stock is a good investment
B)company can earn a satisfactory rate of return
C)company can pay its bills on time
D)company can survive over a long period of time

Question

Quizplus · Accepted Answer

Solvency ratios indicate a company's ability to meet its long-term debt obligations and remain financially viable over a long period of time. Therefore, the best choice is D, as it directly relates to the purpose of solvency ratios.

Solvency Ratios Are Used to Determine Whether or Not a ________