__________ ratios examine the organization's use of debt to finance its assets and whether it's able to meet interest payments on the debt.
A) Liquidity
B) Leverage
C) Conformance
D) Activity
E) Profitability

Question

Quizplus · Accepted Answer

Leverage ratios, such as debt-to-equity ratio and interest coverage ratio, measure the extent to which a company is using debt to finance its operations and whether it can meet its interest payments on the debt. These ratios are important indicators of a company's financial risk and ability to generate cash flow to service its debt obligations.

__________ Ratios Examine the Organization's Use of Debt to Finance