Which of the Following Debt Management Ratios Is the Most

question 101

Multiple Choice

Which of the following debt management ratios is the most inclusive for measuring the degree to which a company relies on outsiders for financing?

• A)debt-to-equity ratio
• B)times interest earned ratio
• C)long-term debt-to-equity ratio
• D)long-term debt-to-total assets ratio

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Definitions:

Partnerships

An official business operation conducted by two or more people, with a shared management system and profit allocation.

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction.

Limited Liability Company

A commercial foundation that unifies a corporation's limited liability with the direct tax benefits characteristic of partnerships or sole proprietorships.

Tax Election

A choice allowed under tax law that enables taxpayers to determine how they want certain tax rules to apply to them.