Which Financial Ratio Measures the Extent to Which Borrowed Funds

question 68

Multiple Choice

Which financial ratio measures the extent to which borrowed funds have been used to finance the company's assets?

• A) debt to asset ratio
• B) debt to equity ratio
• C) long-term debt to capital structure
• D) times interest earned
• E) current liabilities to equity

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Definitions:

Units

A measure of quantity used to express the amount of a product, service, or resource used or produced in a transaction.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit of material.

Units

Basic quantities or measures used to express the amount, level, or extent of something.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributable to variations in the volume of production.