Q205
Long -term solvency is indicated by
A.
Liquidity ratio
B.
Debt-equity ratio
AnswerC.
Return coverage ratio
D.
Both a and b
Answer: Option B
Solution
Answer: Option B
Solution:
Long -term solvency is indicated by Debt-equity ratio. The debt-to-equity (D/E) ratio is calculated by dividing a company's total liabilities by its shareholder equity. These numbers are available on the balance sheet of a company's financial statements.