A(n)____ ratio is a measure of the firm's ability to meet its long-term financial obligations.
A) liquidity
B) income
C) activity
D) operating
E) debt

Question

Quizplus · Accepted Answer

A debt ratio measures the amount of a company's total debt to its total assets, and is a measure of the firm's ability to meet its long-term financial obligations. A higher debt ratio indicates a higher level of financial risk for the company, as it is relying more heavily on borrowed funds to finance its operations.

A(n)____ Ratio Is a Measure of the Firm's Ability to Meet