Which of the Following Solvency Ratios Is the Best Measure

question 58

Multiple Choice

Which of the following solvency ratios is the best measure to determine the degree to which a company relies on outsiders for funds?

• A)Debt-to-equity ratio
• B)Times interest earned ratio
• C)Debt service coverage ratio
• D)Cash flow from operations to capital expenditures ratio

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Definitions:

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner.

Autonomy

The capacity to make an informed, uncoerced decision or the quality of having independence or freedom.

Competence

The ability to effectively perform or undertake a specific task or role.

Advocacy

The act of supporting or arguing in favor of a cause, policy, or group of people, often to influence public policy or resource allocation.