The debt ratio is used primarily as a measure of:
A)Short-term liquidity.
B)Creditors' long-term risk.
C)Profitability.
D)Return on Investment.

Question

Quizplus · Accepted Answer

The debt ratio compares a company's total debt to its total assets and indicates the proportion of a company's assets that are financed through debt. This measure is primarily used by creditors to assess a company's long-term financial risk and its ability to pay off its debts.

The Debt Ratio Is Used Primarily as a Measure Of