The debt ratio indicates the percentage of:
A)Total assets financed by long-term mortgages.
B)Revenue consumed by interest expense.
C)Total assets financed by creditors.
D)Total liabilities classified as current.

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets. This indicates the percentage of total assets that are financed by creditors, making option C the correct answer. Option A refers to the mortgage ratio, option B refers to the interest coverage ratio, and option D refers to the current ratio, which are all different financial ratios.

The Debt Ratio Indicates the Percentage Of