The debt to asset ratio measures: A. the ability of a company to meet its long t

Question

The debt to asset ratio measures:
A. the ability of a company to meet its long term financial obligations
B. The company’s long term profitability
C. The ability of a company to meet its short term financial obligations
D. The company’s short term profitability The debt to asset ratio measures:
A. the ability of a company to meet its long term financial obligations
B. The company’s long term profitability
C. The ability of a company to meet its short term financial obligations
D. The company’s short term profitability
A. the ability of a company to meet its long term financial obligations
B. The company’s long term profitability
C. The ability of a company to meet its short term financial obligations
D. The company’s short term profitability

Explanation / Answer

Debt to assets ratio = Total Debt / Total Assets
generally in this formula, debt means long term debts of the company, hence option A is the answer and debt to assets ratio measures the ability of a company to meet its long term financial obligations .

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