Advertisements
Advertisements
Question
Long term solvency is indicated by ______.
Options
Current Ratio
Quick Ratio
Net Profit Ratio
Debt/Equity Ratio
MCQ
Fill in the Blanks
Advertisements
Solution
Long term solvency is indicated by debt/equity ratio.
Explanation:
Solvency ratios are calculated to determine the ability of the business to serve its debt in the long run, and the Debt‑Equity Ratio (Long‑term Debts ÷ Shareholder’s Funds) is the standard measure of long‑term solvency.
shaalaa.com
Is there an error in this question or solution?
