alleryStart learning →Debt ratios help judge a firm's ability to do what?
ARaise fresh equity capital
BTurn stock into cash
CPay its next dividend
DRepay its long-term debt
Answer & Solution
Correct answer: D. Repay its long-term debt
Debt ratios show how heavily borrowed funds finance the business and whether long-term loans can be met.
Keep practising Financial Ratio
Browse all Financial Ratio questions for CA Inter, or explore more Financial Management topics.
Related questions
Net income is 50,000, revenue 500,000 and total assets 250,000. What is the ROA?Revenue 500,000; COGS 250,000; operating expenses 100,000; tax 25,000. Net profit margin?Tax burden 0.8, interest burden 0.9, ROS 10%, asset turnover 2, equity multiplier 1.5. ROEEBIT is 36 on revenue of 240. What is the return on sales?Revenue is 2,500 and average total assets are 1,000. Asset turnover is?Average total assets are 900 and average equity is 300. The equity multiplier is?Net income is 63 and pretax profit is 90. What is the tax burden?An item costing 80 sells for 100. Profit as a percentage of cost is?