Question

Which one of the following ratios is NOT a part of the Solvency Ratio?

Options

• Debt-Equity Ratio

• Earnings Per Share

• Interest Coverage Ratio

• Debt to Total Assets Ratio

Answer 1

Earnings Per Share

Explanation:

Solvency ratios (like Debt-Equity or Interest Coverage) measure a company’s ability to meet its long-term debt obligations. Earnings Per Share (EPS) is a Profitability Ratio, as it measures the profit earned on each equity share.