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      Question

      Which ratio provides critical information related to

      long term operation of a firm?
      A Profitability Ratio Correct Answer Incorrect Answer
      B Liquidity Ratio Correct Answer Incorrect Answer
      C Solvency Ratio Correct Answer Incorrect Answer
      D Activity Ratio Correct Answer Incorrect Answer
      E All of the above Correct Answer Incorrect Answer

      Solution

      Solvency ratio is one of the various ratios used to measure the ability of a company to meet its long term debts. Debt-Equity Ratio, Debt to Capital Employed Ratio, Proprietary Ratio, Total Assets to Debt Ratio and Interest Coverage Ratio are solvency ratio.

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