The Ratio That Measures the Percentage of Financing from Creditors

question 163

Multiple Choice

The ratio that measures the percentage of financing from creditors is the:

• A)current ratio.
• B)times interest earned ratio.
• C)debt-to-assets ratio.
• D)Price/Earnings ratio.

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Definitions:

Statement of Cash Flows

The statement of cash flows is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing debt, obtaining loans, and dividend payments.

Operating Activities

Activities that relate to the primary operations of a company, like sales, services, and product creation.

Investing Activities

Financial transactions related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.