Debt-To-Equity Ratio Is

question 92

Multiple Choice

Debt-to-equity ratio is

• A)a useless ratio for determining your credit capacity.
• B)calculated by dividing monthly debt payments by net monthly income.
• C)determined by dividing your assets by liabilities.
• D)calculated by dividing total liabilities by net worth.
• E)rarely used by creditors in determining credit worthiness.

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Definitions:

Net Income

The resulting earnings of a business after deducting all expenses and taxes from its total revenue.

Net Working Capital

Represents the difference between a company's current assets and current liabilities, highlighting its short-term financial health and ability to cover its obligations.

Accounts Receivable

The sums of money due to a company for goods or services that have been delivered or used but not yet paid for by customers.

Net Working Capital

Net working capital is the difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to cover short-term obligations.