Which of the Following Is Assessed Using the Debt Ratio

question 160

Multiple Choice

Which of the following is assessed using the debt ratio?

• A) profitability
• B) revenues
• C) risk of default
• D) net income

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Definitions:

Payment Terms

Conditions under which a seller will complete a sale, often detailing the time limit for payment and any discounts for early payment.

Amount Owing

The total sum of money that is due to be paid.

Operating Expense

An ongoing expense incurred in the operation of a business, such as rent, utilities, and salaries.

Operating Profit

Earnings before interest and taxes, calculated by subtracting operating expenses from gross profit.