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Question : The long-term solvency ratio is indicated by

Option 1: current ratio

Option 2: quick ratio

Option 3: net profit ratio

Option 4: debt-equity ratio


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: debt-equity ratio


Solution : Answer = debt-equity ratio

The debt-equity ratio, a long-term solvency ratio, measures a company's financial leverage by comparing its long-term debt to its equity. It indicates the proportion of financing provided by creditors relative to shareholders, assessing the company's ability to meet long-term obligations.
Hence, the correct option is 4.

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