Which of the Following Mathematical Expressions Calculates the Debt Ratio

question 44

Multiple Choice

Which of the following mathematical expressions calculates the debt ratio?

• A)Debt ratio = Net operating income ÷ Total debt
• B)Debt ratio = Long-term liabilities ÷ Current liabilities
• C)Debt ratio = Sales ÷ Total liabilities
• D)Debt ratio = Total liabilities ÷ Total assets
• E)Debt ratio = Interest charges ÷ Total liabilities

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Definitions:

Natural Rate

The rate of any economic variable, such as unemployment or interest, believed to be inherent when the economy is in equilibrium.

Economic Policy

A course of action that is intended to influence or control the behavior of the economy, including taxation, government budgets, and interest rates.

Complex Economy

An economic system featuring a vast array of goods and services, multiple levels of production, and interconnected markets and actors.

Labor Earnings

Income received by workers for their labor services, including wages, salaries, and other forms of compensation.