Which of the following ratios are intended to address the firm's financial leverage?
Correct answer: B. Long-term Solvency Ratios
- A. Liquidity Ratios
- B. Long-term Solvency Ratios
- C. Asset Management Ratios
- D. Profitability Ratios
Explanation
Long-term solvency ratios assess the firm's use of debt and its ability to meet long-term obligations, so they directly address financial leverage. Liquidity ratios focus on short-term payment capacity.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
Balance Sheet is based upon which of the following formula?
Quick Ratio is also known as_________?
Which of the following is a special case of annuity, where the stream of cash flows continues forever?
The conflict of interest between stockholders and management is known as:
During the accounting period, sales revenue is Rs. 25,000 and accounts receivable increases by Rs. 8,000. What will be the amount of cash received from customers for the period?
Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?