Asked by Esmeralda Pimentel on Jul 13, 2024
Verified
The _____,a debt utilization ratio,indicates how much of a firm is financed by debt and how much by owners' equity.
A) debt to liquidity ratio
B) debt to current ratio
C) debt to quick ratio
D) debt to receivables turnover ratio
E) debt to total assets ratio
Owners' Equity
The residual interest in the assets of a company after deducting its liabilities, representing the ownership's stake.
- Understand the significance of various debt ratios and their implications for a firm's financial health.
Verified Answer
CB
Collin BaileyJul 16, 2024
Final Answer :
E
Explanation :
The debt to total assets ratio is a financial metric that indicates the proportion of a company's assets that are financed by debt compared to those financed by the owners' equity. It provides insight into the company's financial leverage and risk level.
Learning Objectives
- Understand the significance of various debt ratios and their implications for a firm's financial health.
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