GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is a financial ratio that gives a measure of a company’s ability to meet its financial losses?
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Leverage Ratio
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Loan-to-Value Ratio
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Cash Reverse Ratio
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Statutory Liquidity Ratio
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Explanation:
Detailed explanation-1: -The debt-to-equity (D/E) ratio indicates the degree of financial leverage (DFL) being used by the business and includes both short-term and long-term debt.
Detailed explanation-2: -A liquidity ratio is a type of financial ratio used to determine a company’s ability to pay its short-term debt obligations. The metric helps determine if a company can use its current, or liquid, assets to cover its current liabilities.
Detailed explanation-3: -Liquidity Ratios Liquidity ratios measure a company’s ability to pay off its short-term debts as they become due, using the company’s current or quick assets.
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