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Debts are an important source of finance for a business. Which of the following ratios indicate the company’s ability to pay long-term debts?

(a)    Asset Management(b)    Leverage(c)    Liquidity(d)    Profitability(e)    Activity.

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Question added by Vinod Jetley , Assistant General Manager , State Bank of India
Date Posted: 2015/04/29
Elke Woofter
by Elke Woofter , Project Assistant , American Technical Associates

I agree with Mr Jetley....................................

Deleted user
by Deleted user

Long term debt increases the company's financial leverage.

Debt to equity ratio is a financial ratio.

 

Profitability is the measure a company's ability to generate earnings relative to sales, assets and equity. These ratios assess the ability of a company to generate profits from assets and resources at management's disposal. The ratios are ‎Gross Profit Margin - ‎Return On Equity (ROE) - ‎Net Profit Margin  

 

Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt obligations. These ratios measure the ability of a company to pay short term debt, operations debt. They are ‎Current Ratio - ‎Acid-Test Ratio - ‎Cash Ratio - ‎Quick Ratio

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

Leverage is the correct answer thank you

Ahmed Mohamed Ayesh Sarkhi
by Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

Option B Leverage Sir ^_^ ....................

Wasi Rahman Sheikh
by Wasi Rahman Sheikh , WAREHOUSE SUPERVISOR , AL MUTLAQ FURNITURE MFG

Agree with experts ++++++++++++++

Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

(b)

Leverage or debt management ratios indicate the company’s ability to pay long-term debts.

Nasir Hussain
by Nasir Hussain , Sales And Marketing Manager , Pakistan Pharmaceutical Products Pvt. Ltd.

(b) Leverage .........................................................................................

Khaled Anwar
by Khaled Anwar , Senior Sales Engineer , "Automotive company''

I think the answer is:  (b) Leverage

Yaqoub Alomar
by Yaqoub Alomar , Civil Engineer , Al-Zubeir municipality

     --------------------   Aqree with Mr. Ahmed Abdullah

Thank you

Salvatore Augello
by Salvatore Augello , owner , A.S. Trade & Consult

answer B______ leverage _______

Mohammad Athar
by Mohammad Athar , Senior Accountant , Techno

Option B is correct. It is also known as debt-equity ratio.

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