Debt Equity ratio is a __________ .

Solvency ratio

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Payout ratio

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Liquidity ratio

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Accounting ratio

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Solution

The correct option is D Solvency ratio
Solvency means the position of a company to meets its long term obligations. Solvency ratio is ratio that shows whether the company will be able to meet its long term obligations as when they become due. Debt to equity ratio is calculated to measure the long term soundness of the company. It expresses the relationship between external debts and internal equities.

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Similar questions

Debt-equity ratio is a sub-part of _______.

The debt-to-equity ratio is a measure of a firm's ___

A ______ debt-to-equity ratio indicates a lower amount of financing by debt via lenders versus funding through equity via shareholders.

A lower value of debt to equity ratio represents:

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