Which of the following ratios and rates that measure debt-paying ability focuses on the long-term position of a company?
A)Quick ratio
B)Inventory turnover
C)Current ratio
D)Debt ratio

Question

Quizplus · Accepted Answer

The debt ratio measures the long-term position of the company as it compares the total liabilities to the total assets. It indicates the amount of debt a company has relative to its assets and can give insight into the company's ability to pay back its long-term debt obligations. The other options focus on short-term debt-paying abilities (quick ratio and current ratio) and inventory management (inventory turnover).

Which of the Following Ratios and Rates That Measure Debt-Paying