_____ indicates the company's ability to meet its long-term financial obligations.
A) Profitability ratio
B) Liquidity ratio
C) Debt-equity ratio
D) Current ratio
E) Net working capital ratio

Question

Quizplus · Accepted Answer

The debt-equity ratio measures the amount of debt a company has in relation to its equity. A low debt-equity ratio indicates that a company has a strong ability to meet its long-term financial obligations, while a high debt-equity ratio indicates that the company may have difficulty paying its debts. Therefore, the debt-equity ratio is a good indicator of a company's financial strength and ability to meet its long-term obligations.

_____ Indicates the Company's Ability to Meet Its Long-Term Financial