GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following ratio is the indicator of the long term solvency of the firm?
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Acid test ratio
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Debt equity ratio
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Time interest earned ratio
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None of these
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Explanation:
Detailed explanation-1: -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.
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